FTC looks into Tesla's claims on autopilot technology

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FTC looks into Tesla's claims on autopilot technology

Published: 19 Jul. 2020, 15:59 Updated: 21 Jul. 2020, 17:22

Tesla's Model3 on display at the Seoul Motor Show in March 2019. [YONHAP]

Tesla, which had surging sales in Korea, is under investigation by the antitrust agency for false advertising.

According to industry sources, the Fair Trade Commission (FTC) has been looking into whether the U.S.-based electric vehicle (EV) company has exaggerated its autopilot technology.

Tesla has advertised that its autopilot system not only controls the direction of the vehicle, but also controls the speed at which it travels.

However, according to auto industry experts, Tesla’s autopilot system is closer to driver-assistance technology than the kind of full autonomous driving that does not require the help of a driver.

The review by Korea's antitrust agency comes on the heels of a German court ruling on the same issue last week.

A Munich court ruled in favor of the non-profit organization The Center for Protection Against Unfair Competition, which sued Tesla for misleading consumers about its automated driving systems.

In a statement by the organization’s lawyer, Andreas Ottofuelling, the legal framework for autonomous inner-city driving does not exist in Germany yet, and other functions do not work as advertised by Tesla.

Tesla is the hottest selling electric vehicle (EV) in the Korean market and is more popular than domestic EVs.

According to the Korea Automobile Manufacturers Association (KAMA), Tesla’s Model3 sold 6,839 units in Korea in the first half of this year.

The second most popular EV was Hyundai Motor’s Kona, which sold 4,078 units, followed by Kia Motors’ Niro with 1,942 and Chevrolet’s Volt having sold 1,268.

This is a remarkable performance considering the first Model3 was sold in Korea last November, when 113 units were delivered to customers that waited more than three and a half years after placing orders.

The Model3 had a strong appeal to early adopters with its lower selling price compared to early Tesla models as well as its top-notch technologies like the autonomous driving system.

Another appeal factor was a government subsidy that knocked down prices.

The sticker price for the Model3 in Korea is 53.69 million won ($44,700). Buyers are eligible for an 8 million won subsidy if purchasing environment-friendly vehicles.

They are also eligible for additional subsidies from local governments including Seoul, which offer a 4.5 million won subsidy.

A Model3 bought in Seoul costs only 41.19 million won thanks to the combined 12.5 million won subsidy.

Some have argued that the government shouldn't subsidize foreign carmakers. However, under a World Trade Organization (WTO) rule, a country can not discriminate against foreign carmakers if it offers a subsidy on local cars.

BY KIM DO-NYUN, LEE HO-JEONG