Mercedes-Benz Fined Nearly $8 Million for Misleading EV Battery Claims in South Korea

Mercedes-Benz has been penalized 11.2 billion Korean won (approximately $7.8 million USD, or $7.6 million USD according to other reports Reuters) by South Korea’s Fair Trade Commission (FTC) for falsely advertising the battery technology used in its EQE and EQS electric vehicles. The automaker misrepresented the battery source to consumers, claiming the vehicles were equipped with batteries from CATL when, in fact, some models utilized batteries from Farasis Energy.

Deceptive Marketing Practices

The FTC investigation revealed that Mercedes-Benz Korea and its German headquarters deliberately concealed information about the battery cells used in the EQE and EQS models. Starting in June 2023, these vehicles were fitted with battery cells manufactured by Farasis, a Chinese company. However, marketing materials and sales guidelines consistently emphasized the superiority of CATL batteries, highlighting their “industry-leading technology” and “world’s No. 1 market share.”

Dealers were specifically instructed to promote the advantages of CATL batteries when responding to customer inquiries, leading consumers to believe they were purchasing vehicles equipped with CATL technology. Autoblog reports that consumers purchased vehicles based on this inaccurate information.

Farasis Battery Recall and Safety Concerns

The deception is particularly concerning given that Farasis Energy had previously conducted a major recall in China in March 2021 due to fire risks associated with its battery cells. The EQE and EQS are the only electric vehicles currently sold in South Korea that utilize Farasis batteries.

Adding to the concerns, Mercedes-Benz recently advised customers in the United States with vehicles equipped with Farasis batteries to charge them outdoors due to potential ignition risks. Sedaily

FTC Action and Further Investigation

In addition to the financial penalty, the FTC has referred both Mercedes-Benz AG and Mercedes-Benz Korea to prosecutors for further investigation into the extent of responsibility and the circumstances surrounding the deceptive practices. Chosun reports that the KFTC (Korea Fair Trade Commission) determined Mercedes-Benz concealed information about the Farasis batteries although actively promoting CATL.

Market Context: CATL and Farasis

CATL held a 39% share of the global EV battery market in 2025, solidifying its position as a leading battery supplier. Reuters Conversely, Farasis Energy did not rank among the world’s top 10 battery suppliers.