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A South Korean regulatory body has fined Tesla 2.8 billion won (US$2.2 million) for exaggerating the performance of its cars.

It was also fined 1 million won for violating the Electronic Commerce Act by charging consumers 100,000 won for canceling orders.

The Korea Fair Trade Commission said Tuesday that it penalized Tesla Korea and Tesla Inc. 2.85 billion won for violating the Fair Labeling and Advertising Act for false and misleading advertising, as well as 1 million won for violating the Act on the Consumer Protection in Electronic Commerce by making it difficult to cancel orders.

It also issued a correction order.

Tesla is accused of misleading consumers about the driving range of its cars, the performance of its superchargers and expected fuel savings on its Korean homepage from August of 2019 until recently.

Tesla advertised that you could drive more than 528 kilometers on a single charge, but this was a weighted value based on the maximum city and highway driving ranges in normal temperatures.

Under most driving conditions, the range is shorter than advertised.

In particular, in cold weather, the maximum city driving range is just 220.7 kilometers on a single charge.

Tesla has two superchargers, the V2 and V3.

The V3 recharges about twice as fast as the V2.

When Tesla first began advertising, it printed the performance of the V3 under ideal conditions, even though cars sold in Korea had only the V2.

Moreover, the company calculated its fuel cost based on a domestic average recharging cost of 135.53 won per kilowatt-hour, about 1.4 to 1.9 times the average of Korea’s top 10 recharging businesses, making it appear as if customers would save a lot of money.

The Korea Fair Trade Commission found that Tesla interfered with the customer’s right to cancel orders with just cause by charging consumers a contract violation penalty of 100,000 won when canceling orders.

From January of 2020 to January of 2021, Tesla charged 100,000 won when customers purchased cars through its online shopping mall, which they refused to return if the order was canceled.

The company made 95.2 million won a year in commissions this way.

Making the cancellation of online orders a hassle constituted a violation of the Electronic Commerce Act.

By Lee Ji-hye, staff reporter

Please direct questions or comments to [english@hani.co.kr]