Tesla (TSLA.O), has misled tens of thousands of South Korean customers by marketing driver-assistance software that the company knows cannot be legally used in most of its vehicles in the country, according to a complaint an advocacy group plans to file with a consumer protection agency on Thursday.
Tesla has marketed Full Self-Driving (Supervised) software to prospective buyers in South Korea for years, often collecting lump-sum payments of 9.043 million won ($6,726).
FSD can be used on about 20% of Tesla vehicles registered in South Korea — those manufactured in the US, Tesla Korea country manager Seo Young-deuk said in parliamentary testimony last month. Those cars meet US vehicle-safety standards that South Korea recognizes as part of a free trade agreement, according to the forthcoming complaint to the Korea Fair Trade Commission (KFTC), seen by Reuters.
The complaint to the regulator, which also handles antitrust, has not been previously reported.
Most Tesla vehicles in South Korea, however, are manufactured in China, where no such agreement exists. Tesla only recently started the process for obtaining FSD certification for China-made vehicles, despite charging customers for the software for more than three years.
Tesla did not respond to requests for comment. A KFTC official said the agency launched a probe earlier this year into Tesla’s advertising of its FSD system and has received written responses from the company, but declined to provide further details.
SOUTH KOREAN FAIR TRADE COMMISSION INVESTIGATING
It is unclear how many South Korean customers purchased FSD subscriptions on ineligible vehicles, but Tesla has sold more than 170,000 Shanghai-produced vehicles in South Korea since 2023, according to Tesla data sent to South Korea’s National Assembly.
“Tesla generated substantial revenue by selling an expensive driver-assistance system to mass-market buyers who cannot use it for even a single day,” said Choi Young-suk, who leads automotive issues at the advocacy group Citizens United for Consumer Sovereignty.
Tesla continued to market FSD as sales of ineligible China-manufactured Teslas surged in South Korea in recent years. Sales of FSD-incompatible Teslas made in China grew more than fivefold in South Korea from 2023 through last year, when 99% of new Teslas sold in South Korea could not legally use FSD, according to data Tesla submitted to the National Assembly.
Despite years of promises from CEO Elon Musk that all Teslas would soon become fully driverless vehicles, FSD is not autonomous and requires active human supervision.
Tesla has sought to expand FSD’s reach beyond North America, particularly in Europe, where the company has waged a pressure campaign against European regulators.
