Friday, March 1, 2024
Business News

Tesla has been hit with a $2.2 million fine in South Korea

Tesla has been hit with a $2.2 million fine in South Korea over allegations of false advertising related to the driving range of its electric vehicles (EVs).

The country’s antitrust regulator accused Tesla of exaggerating the distance that its EVs can travel on a single charge, as well as their fuel efficiency compared to traditional gasoline vehicles. In addition, the regulator claimed that Tesla overstated the performance of its Superchargers, which are charging stations for EVs.

The regulator stated that it will be imposing a fine of 2.85 billion won ($2.2 million) on Tesla for these false advertising claims.

This is not the first time that Tesla has faced regulatory action over its advertising practices. In 2018, the company was ordered to pay $20 million to settle charges brought by the U.S. Securities and Exchange Commission (SEC) over its failure to disclose to investors the potential risks of using Autopilot, its advanced driver assistance system.

The SEC had alleged that Tesla made “numerous statements, in press releases, SEC filings, earnings calls, and through social media” that overstated the capabilities of Autopilot and “created the impression that Autopilot was safer and more advanced than it was.”

In a statement, Tesla said it will “respectfully disagree” with the South Korean regulator’s decision and will consider its options for appeal. The company added that it “stands behind the accuracy of the information” it provided to consumers.

Tesla’s false advertising claims in South Korea come at a time when the company is facing increasing scrutiny over its business practices and financial stability. The company has struggled with production delays and quality control issues, and its stock price has been highly volatile in recent months.

Despite these challenges, Tesla remains a major player in the EV market and has consistently outsold its competitors. In the third quarter of 2022, the company reported record sales of its Model 3 sedan, which helped it achieve its fifth consecutive quarter of profitability.

However, the false advertising allegations in South Korea could damage Tesla’s reputation and undermine consumer trust in the company. It remains to be seen how the fine will impact Tesla’s operations in the country and whether it will deter the company from making false advertising claims in the future.