The Korea Fair Trade Commission (KFTC), South Korea’s antitrust regulator, has launched an investigation against US-based EV maker Tesla over the company’s alleged “exaggerated” claims about its electric cars’ range. The investigation was confirmed by a representative of the KFTC on Tuesday.
News about the investigation was initially posted by Seoul-based Yonhap News Agency late Monday. The Fair Trade Commission examiner reportedly sent a review report, equivalent to the prosecution’s indictment, to Tesla. The document outlined potential sanctions, including possible fines against the company, for allegedly violating South Korea’s Fair Labeling and Advertising Act.
“We plan to hold a meeting to decide the level of sanctions against the automaker,” a KFTC official later stated.
What seems to be a key part of the KFTC’s grievance against Tesla lies in the company’s range estimates for its vehicles. Tesla, for example, notes on its website that the Model 3 sedan can travel 528 km (328 miles) per charge. According to the KFTC, this number may not be accurate, especially if the vehicle is being driven in temperatures that are below freezing.
It should be noted that range loss during cold weather driving is not a Tesla-exclusive issue. Analysts have noted that most electric vehicles generally experience some loss of driving range during cold weather. The same is true for internal combustion cars, since gas-powered vehicles typically consume more fuel when temperatures drop. “Gas cars lose range just like electric cars; you’re consuming more fuel in winter than in summer,” Yves Racette, a Quebec-based consultant, said.
Apart from potential sanctions because of its vehicles’ range estimates, the Korea Fair Trade Commission is also planning on imposing a fine against Tesla over the company’s alleged practice of not refunding a 100,000 won ($83) order fee, which customers are required to pay when they place an order for a vehicle. The KFTC noted that the $83 fee does not get returned even if the customer cancels their order.
The KFTC argues that Tesla’s order fee practices infringe on consumers’ right to withdraw subscription. A review report about the issue has been sent to the electric vehicle maker.
Tesla is yet to issue a response to the KFTC’s recent investigation.
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