Mercedes-Benz Korea fined $7.64 mil. over misleading EV battery information

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

By Lee Min-hyung

• Published Mar 10, 2026 12:01 PM KST
• Updated Mar 10, 2026 9:59 PM KST

FTC says carmaker deceived consumers by concealing Farasis batteries while promoting CATL technology

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 its EQE and EQS EV models and claimed in promotional materials that the vehicles were equipped with batteries from CATL, the world’s largest battery maker, which is headquartered in China.

Mercedes-Benz Korea distributed an internal sales manual to dealers in June 2023 with detailed information about its EV lineup. Although many of the models were equipped with battery cells produced by Farasis Energy, a lesser-known Chinese supplier, the carmaker focused on promoting the upsides of CATL batteries in the manual and omitted the fact that it also equipped some of 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 in the 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.

The watchdog said the sales guide from the carmaker also included some promotional talking points about CATL’s industry-leading technology and global market share, but did not include any information on Farasis batteries.

The local subsidiary received education materials on the battery suppliers for each EV lineup from the German headquarters in May 2021. Mercedes-Benz Korea and its German headquarters deliberately withheld information on Farasis batteries from the Korean sales guide, according to the FTC investigation.

Dealers were not aware that some of the models were equipped with Farasis batteries, and engaged in promotional activities highlighting the strength of CATL batteries. The investigation also showed that Mercedes-Benz Korea sold some 3,000 vehicles with Farasis batteries, with sales valued 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 sales from unfair trade practices. The authority decided to levy the highest fine possible on the carmaker, as the incident was closely linked with public safety.

The FTC said the carmaker “unfairly induced customers” and misled them by securing help from dealers. The authority also reported the case to prosecutors for further investigation.

“The watchdog will sternly sanction any undue profiteering activities that harm the order of fair transactions,” an FTC official said.

“We will also strengthen oversight of any such unfair acts on the market, so that key information that can influence consumers’ purchasing decisions must be provided accurately.”

Mercedes-Benz Korea challenged the FTC penalty.

"We respect the decision made at the FTC's plenary session. However, we firmly disagree with the commission's final decision," a company official said. "We will take necessary legal measures, including an administrative lawsuit, to ensure our position is clearly communicated and thoroughly considered."