Mercedes-Benz fined $7.6m for misleading EV battery claims

South Korea’s antitrust regulator, the Korea Fair Trade Commission, fined Mercedes-Benz 11.2 billion won, about US$7.6 million, for misleading consumers about the battery suppliers used in some EQE and EQS EVs.

The Korea Fair Trade Commission said Mercedes distributed sales guidelines suggesting that all EQE and EQS EVs were equipped with battery cells made by CATL, but some cars actually had cells from Farasis Energy – information that concealed from dealers and consumers.

The investigation followed after finding that battery cells in a Mercedes EV involved in an August 2024 were made by Farasis.

About 3,000 vehicles with Farasis cells were sold between June 2023 and August 2024 with sales of roughly 281 billion won (US$190.25 million), and the 11.2 billion-won (US$7.6 million) fine equals about 4 percent of those sales and was the maximum penalty allowed under the law for such unfair practices, the FTC said.

Both Mercedes’ German headquarters and its Korean unit face referral to prosecutors for their roles in distributing the misleading guidelines.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

One fire set off a slide in sales and confidence

The fine came after an August 2024 fire in an underground parking lot in Incheon, South Korea, involving a Mercedes-Benz EV with Farasis Energy battery cells 1.
The blaze sparked public anger. It also drew attention to Farasis Energy, a Chinese battery maker, supplying cells for a luxury model and fed a “China-made battery phobia” 2.
Mercedes-Benz Korea took a sharp hit, with EV sales down 72.2% in the first half of the year. The decline was far steeper than Audi Korea and BMW Korea 3.
Mercedes-Benz used Farasis partly because it arrived late to the EV market, while established South Korean battery suppliers were already tied up with competitors, a battery specialist told the Korea Herald 2.

Batteries are turning into a front-and-center selling point

The incident pushed automakers toward quicker disclosure, with Hyundai Motor Co., Kia Corp., and BMW Korea naming battery suppliers in South Korea 1.
The shift tracks the European Union’s plan for a mandatory “battery passport” (a product record that tracks a battery’s origin, materials, and lifecycle information) starting in 2027 4.
Batteries now carry brand weight, so automakers weigh supplier reputation along with technical specs and cost 2.
This opens a new contest among cell makers, with some South Korean firms betting that clearer sourcing will help their reliability stand out against some Chinese rivals 1.