Quick Highlights:
- South Korea’s Korea Fair Trade Commission (FTC) fined Mercedes-Benz 11.2 billion won ($7.6 million) for misleading consumers about EV battery suppliers.
- The company’s sales guide indicated batteries from CATL, while some vehicles actually used cells from Farasis Energy.
- Around 3,000 EVs sold between June 2023 and August 2024 were affected, generating about 281 billion won in sales.
- Authorities imposed the maximum penalty allowed under law and referred the case to prosecutors.
Mercedes-Benz Fined $7.6 Million in South Korea Over EV Battery Supplier Misrepresentation
South Korea’s antitrust watchdog has imposed a significant penalty on Mercedes-Benz after finding that the company misled dealers and consumers about the battery suppliers used in certain electric vehicles. The Korea Fair Trade Commission (FTC) fined the automaker 11.2 billion won (approximately $7.6 million) and referred the case to prosecutors, highlighting the seriousness of the alleged violation.
The decision comes amid increasing scrutiny over transparency in the electric vehicle supply chain, especially regarding battery sourcing.
FTC Investigation Reveals Misleading Battery Information
According to the FTC’s findings, the controversy revolves around internal sales guidance distributed by Mercedes-Benz to dealers. The guide suggested that the company’s electric vehicles were equipped with battery cells supplied by Contemporary Amperex Technology Co. Ltd. (CATL), the world’s largest EV battery manufacturer.
However, the investigation revealed that some vehicles were actually fitted with battery cells from Farasis Energy, another Chinese battery supplier.
Crucially, this information was not disclosed in the sales material provided to dealers or consumers, creating what regulators described as an inaccurate impression about the vehicles’ battery technology.
In my view, transparency around battery suppliers has become an important factor for EV buyers. Battery reputation directly influences perceptions about reliability, safety, and long-term performance.
CATL vs Farasis: A Significant Industry Gap
One of the reasons regulators considered the issue serious is the difference in industry standing between the two suppliers.
- CATL held about 39% of the global EV battery market in 2025, making it the dominant player in the sector.
- Farasis Energy, meanwhile, did not rank among the top 10 global battery suppliers, according to industry tracker SNE Research.
By highlighting CATL in its sales materials without clarifying that some vehicles used Farasis cells, the FTC concluded that Mercedes-Benz’s communication could influence purchasing decisions in a misleading way.
From a consumer perspective, brand associations in EV batteries carry weight similar to engine specifications in traditional cars.
Around 3,000 Vehicles Affected
The regulator also outlined the scale of the issue.
- Approximately 3,000 electric vehicles equipped with Farasis battery cells were sold.
- Sales took place between June 2023 and August 2024.
- Total revenue from these vehicles reached around 281 billion won.
The 11.2 billion won penalty represents about 4% of those sales, which the FTC said is the maximum fine permitted under current law for unfair trade practices.
Mercedes-Benz and Korean Unit Referred to Prosecutors
Beyond the financial penalty, regulators also took additional enforcement steps.
The FTC said both Mercedes-Benz headquarters in Germany and its Korean subsidiary were involved in the creation and distribution of the sales guidance.
As a result, the regulator referred both entities to prosecutors, indicating the potential for further legal proceedings.
Authorities stated they would continue to act firmly against business practices that undermine fair competition or consumer trust.
Mercedes-Benz Responds to the Decision
Mercedes-Benz Korea acknowledged the ruling but pushed back against the regulator’s conclusions.
In its statement, the company said it respects the FTC’s decision but “firmly disagrees” with the commission’s final ruling. The automaker did not provide further details about the grounds for its objection.
Such disputes between regulators and manufacturers are not unusual, especially in cases involving complex supply chains.
Why Battery Transparency Is Becoming a Regulatory Focus
The case comes at a time when electric vehicle battery sourcing is increasingly under the spotlight.
Batteries represent the most expensive and safety-critical component of an EV, and consumers often consider the battery supplier when evaluating a vehicle’s reliability.
In my opinion, regulators stepping in on disclosure issues signals a broader trend: EV buyers are demanding the same level of transparency about battery technology as they expect for performance or safety features.
South Korea’s decision to impose the maximum fine and pursue criminal referral suggests that battery supplier disclosure is now viewed as a matter of consumer protection, not just marketing accuracy.
Frequently Asked Questions — FAQs
Q. Why was Mercedes-Benz fined in South Korea?
- Mercedes-Benz was fined 11.2 billion won ($7.6 million) by the Korea Fair Trade Commission for misleading consumers about the battery suppliers used in some of its electric vehicles.
Q. Which Mercedes EV models were involved in the investigation?
- The case focused on Mercedes-Benz EQE and EQS electric vehicles, where some units used batteries from Farasis Energy despite sales materials highlighting CATL.
Q. How many vehicles were affected by the issue?
- Around 3,000 vehicles sold between June 2023 and August 2024 were identified as having Farasis battery cells.
Q. Why does the battery supplier matter for EV buyers?
- Battery suppliers influence vehicle safety, performance, durability, and brand trust. Leading manufacturers often have stronger reputations and proven reliability.
Q. What action did the South Korean regulator take besides the fine?
- The regulator referred both Mercedes-Benz headquarters and its Korean subsidiary to prosecutors and ordered the company to correct its sales and marketing practices.
Q. Is Mercedes-Benz challenging the decision?
- Yes. Mercedes-Benz Korea stated that it respects the regulator’s ruling but strongly disagrees with the final decision, though it did not detail its objections.
