Mercedes-Benz is facing major regulatory action in South Korea after authorities found that the company misled customers regarding battery suppliers used in its electric vehicles. The countrys antitrust regulator has imposed a 12.23 billion won (around $7.6 million / Rs 63 crore) fine on the automaker following an investigation into its marketing practices. The penalty was announced by the Fair Trade Commission (FTC), which concluded that Mercedes-Benz Korea concealed information about the actual battery supplier used in certain EV models sold in the country.

Misleading Battery Supplier Information

According to the FTC investigation, Mercedes-Benz Korea promoted some of its EV models as being equipped with batteries supplied by CATL, the worlds largest EV battery producer. However, authorities found that several vehicles were actually fitted with battery cells from Farasis Energy, a lesser-known supplier. The affected vehicles include premium electric sedans such as the Mercedes-Benz EQE and .

The investigation revealed that Mercedes-Benz Korea circulated internal sales manuals to dealers highlighting the advantages of CATL batteries, including references to the companys global market leadership and advanced technology. However, the documents reportedly omitted any mention of Farasis batteries, even though some vehicles used them. As a result, dealers themselves were unaware of the actual battery supplier and continued promoting the EVs as having CATL batteries when communicating with customers.

Fire Incident Triggered Investigation

The issue came under scrutiny after a battery fire involving a parked EQE electric sedan in August 2024 in Incheon, South Korea. The vehicle was equipped with a battery from Farasis Energy. The incident occurred in an underground parking facility at an apartment complex and caused extensive damage.

Reports suggest that more than 100 vehicles parked nearby were destroyed, while residents had to be evacuated from the building. Following the incident, regulators launched a detailed probe into Mercedes-Benz Koreas EV battery disclosures and marketing practices.

Around 3,000 Vehicles Affected

Authorities estimate that Mercedes-Benz Korea sold around 3,000 vehicles equipped with Farasis batteries between June 2023 and August 2024, generating sales worth approximately 281 billion won. Under South Korean law, regulators can impose fines of up to 4% of the relevant sales value for unfair trade practices. The FTC said it decided to impose the maximum level of penalties due to the seriousness of the case and its link to public safety concerns.

In addition to the fine, the regulator has ordered Mercedes-Benz Korea to correct its marketing practices and provide transparent information regarding battery suppliers used in its EV lineup. The case has also been referred to prosecutors for further investigation.

Mercedes-Benz Disputes The Decision

Mercedes-Benz Korea has responded by stating that it respects the FTCs decision but disagrees with its conclusions. The company has indicated that it plans to pursue legal options, including filing an administrative lawsuit to challenge the ruling. The case highlights growing regulatory scrutiny around EV battery transparency and safety, especially as electric vehicle adoption continues to accelerate globally.

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