Police and fire authorities and Mercedes-Benz officials conduct a joint investigation into the cause of a fire involving the carmaker’s EQE electric sedan in Incheon, Aug. 8, 2024. Korea Times photo by Park Si-mon
Mercedes-Benz Korea was slapped with a 12.23 billion won ($7.64 million) fine for misleading customers with false battery information on some electric vehicles (EVs), which triggered a major safety scandal in 2024, the Fair Trade Commission (FTC) said Tuesday.
The nation’s antitrust watchdog also ordered the carmaker to rectify its deceptive marketing practices. According to the investigation findings, the carmaker concealed the actual battery supplier for certain models — its EQE and EQS EVs — and claimed in promotional materials that the vehicles were equipped with batteries from CATL, the world’s largest battery maker from China.
Mercedes-Benz Korea distributed an internal sales manual to dealers in June 2023 with detailed information about its EV lineup. Even if many of the models were equipped with battery cells produced by Farasis Energy, a much lesser-known Chinese supplier than CATL, the carmaker focused on promoting the upsides of CATL batteries in the manual and omitted the fact that it also equipped some of the models with Farasis batteries.
The FTC launched the investigation into the German luxury carmaker after a parked EQE electric sedan with a Farasis battery caught fire at an underground parking lot of an apartment complex in Incheon in August 2024. The incident caused massive damage, forcing dozens of residents to evacuate and destroying more than 100 other vehicles parked nearby.
Damaged vehicles are seen after a Mercedes-Benz EQE electric sedan caught fire in an underground parking lot in Incheon, Aug. 2, 2024. Yonhap
The watchdog said the sales guide from the carmaker also included some promotional talking points, such as CATL’s industry-leading technology and No. 1 global market share, but it never stated any information on Farasis batteries.
Mercedes-Benz Korea and its German headquarters were already aware of the battery suppliers, but deliberately withheld information on Farasis in its sales guide here, according to the FTC investigation. The local subsidiary received education materials on the battery suppliers for each EV lineup from the German headquarters in May 2021.
Dealers were not aware of the fact that some of the models were equipped with Farasis batteries, and engaged in promotional activities by highlighting the strength of CATL batteries. The investigation also showed that Mercedes-Benz Korea sold some 3,000 vehicles with Farasis batteries, and their combined sales were valued at around 281 billion won between June 2023 and August 2024.
Under the current law, the regulator can impose fines of up to 4 percent of related sales from unfair trade practices. The authority decided to levy the highest level of fines on the carmaker, as the incident was closely linked with public safety.
Source: Korea Times News
