Mercedes-Benz Hit With $7.6 Million Fine in South Korea Over EV Battery Supplier Misrepresentation

South Korea's Korea Fair Trade Commission (FTC) has fined Mercedes-Benz 11.2 billion won ($7.61 million) for misleading consumers about the battery suppliers used in some of its electric vehicles. The regulator also ordered the company to rectify its sales and marketing practices and announced it would refer the matter to prosecutors — steps that underscore the seriousness with which South Korean authorities have approached the case.

According to Reuters, the FTC's investigation centred on an internal sales guide that Mercedes-Benz distributed to dealers, which indicated that its EV models were equipped with battery cells made by China's Contemporary Amperex Technology Co. Ltd. (CATL) — the world's largest battery maker. Some Mercedes EV models, however, were fitted with battery cells supplied by China's Farasis Energy, information that was omitted from the sales guide and not disclosed to dealers or consumers.

The two suppliers occupy markedly different positions in the global battery industry. Reuters noted that CATL held a 39% share of the global EV battery market in 2025, while Farasis Energy did not rank among the world's top 10 battery suppliers, according to industry tracker SNE Research. By promoting CATL's credentials without disclosing that a portion of its vehicles were fitted with cells from a far lesser-known manufacturer, Mercedes-Benz's communications created an inaccurate impression of its products for consumers making purchasing decisions.

The commercial scale of the issue was considerable. About 3,000 vehicles containing Farasis battery cells were sold between June 2023 and August 2024, with total sales amounting to roughly 281 billion won. The fine of 11.2 billion won represents approximately 4% of those related sales — and Reuters reported that it was the maximum penalty allowed under the law for such unfair practices.

The FTC's action was not limited to a financial sanction. The regulator said it would refer both Mercedes-Benz's headquarters in Germany and its Korean unit to prosecutors, saying the two were involved directly or indirectly in creating and distributing the sales guidelines.

An FTC official said Mercedes-Benz's German headquarters and its Korean unit would jointly pay the fine. In a statement, the regulator said it would act firmly against conduct that harms fair transactions, and that information material to consumers' purchasing decisions — particularly where public safety is a concern — must be accurately communicated.

Mercedes-Benz Korea acknowledged the regulator's ruling but pushed back on its substance. The company said it respected the FTC's decision but "firmly disagreed" with the commission's final decision. The company did not elaborate further on the nature of its objections, according to Reuters.

The case arrives at a moment of heightened scrutiny over EV battery transparency in South Korea. The FTC's decision to apply maximum penalties and pursue a criminal referral signals a regulatory stance that treats battery supplier disclosure not merely as a commercial matter but as one with direct implications for consumer safety and trust.