Elon Musk-owned Tesla has been ordered to pay $2.8 billion won (approximately US$2.2 million) by the antitrust watchdog in South Korea over alleged false advertising about its electric vehicles’ capabilities in low temperatures.
According to Bloomberg, the automotive giant violated the country’s advertisement laws by promoting and overstating the driving range and charging speed of its electric vehicles, as well as how much savings there would be on fuel costs by using its vehicles.
South Korea’s Fair Trade Commission (KFTC) said at a press conference on Tuesday that Tesla had exaggerated the “driving ranges of its cars on a single charge, their fuel cost-effectiveness compared to gasoline vehicles as well as the performance of its Superchargers” on its official website in South Korea since August 2019 until recently.
Nam Dong-il, a KFTC spokesperson, said at the press conference that Tesla had shared “false, exaggerated, and deceptive advertisements,” about its vehicles.
According to the KFTC, the driving range of the Tesla vehicles has been exaggerated and they plunge in cold weather by up to 50.5%, compared to its online advertisements.
The car maker’s website offers recommendations to its customers for winter driving, such as using external power sources to pre-condition the vehicle and using its updated Energy app to track usage of energy consumption.
However, the website fails to tell its customers about the shorter driving range of electric vehicles in sub-zero temperatures, which shortens the battery life of its vehicles.
As a result, Tesla engaged in deceptive advertising and exaggerated the driving range, charging speed, and potential cost savings of its electric vehicles stated the South Korean Fair Trade Commission.
The Korean antitrust regulator launched an investigation against Tesla in February for misleading potential customers, after which, the Elon Musk-led company modified its advertisements on Tesla’s Korean-language website.
In addition to the 2.8 billion won fine, the regulator will impose an additional penalty of 1 million won on Tesla for violating the country’s Electronic Commerce Act, as the company did not provide sufficient information to consumers on its cancellation policy, Bloomberg said.
The Free Trade Commission also plans to send a notice to Tesla to correct the activities. Tesla has yet to comment on the matter.