Tesla fined in Korea for false advertising, violating e-commerce laws

A charging area for Tesla electric vehicles in Gangnam, southern Seoul, on Tuesday. [NEWS1]

Tesla was fined more than $2 million by the Fair Trade Commission (FTC) for false advertising and for violating e-commerce laws.

The company made false and exaggerated claims about the distance its electric vehicles can drive per charge and the specifications of its supercharger, according to the FTC Tuesday. The antitrust agency added that Tesla made deceptive claims about cost savings for customers using its vehicles compared with gasoline cars.

The FTC fined Tesla 2.85 billion won ($2.24 million) for the advertising violations and another 1 million won for not providing customers sufficient information on canceling orders.

The FTC also issued a corrective order without a fine for preventing customers from canceling orders online and charging 100,000 won for canceling orders.

Tesla violated advertising laws from August 2019 until recently.

Some consumers claimed an autopilot system advertised by Tesla misled them into thinking the vehicle was fully autonomous or drove itself without any input from human drivers.

But the FTC “concluded it’s difficult to conclude that consumer misconception related to autopilot violated the law,” said Nam Dong-il, director at the consumer policy division at the FTC, at a press briefing on Tuesday.

Tesla said its cars can drive “more than” a certain distance per charge, misleading customers that the car can drive the distance in all conditions, said the FTC.

Tesla uses the expression “up to” in the United States.

The electric carmaker claimed its supercharger is able to charge a car so it can be driven a certain distance within 30 minutes or 15 minutes, without fully disclosing the types of superchargers and the conditions in which the charger was tested.

The FTC found the superchargers V2 and V3 could not meet the claims.

Tesla “led customers to misunderstand the factors that they prioritize when buying an electric car, disrupting them from making a reasonable choice and possibly the fair trade order,” the FTC said in a statement.

It added the latest decision is meaningful in that violations of consumer rights were detected and restricted in the field of new technology and industry.

Teslas were the best selling electric cars in Korea in the first half of 2020 and 2019, with a 43.3 percent share and 7,080 units sold in the first half of 2020, according to Korea Automobile Manufacturers Association. Tesla was distantly followed by Hyundai Motor’s 29.8 percent and Kia’s 14.1 percent.

BY JIN MIN-JI [jin.minji@joongang.co.kr]