Mercedes Fined €6.5M in South Korea for EQE and EQS Battery Deception

South Korea's Fair Trade Commission has slapped Mercedes-Benz with a fine of 11.2 billion won (€6.5 million) for deceiving consumers about the battery suppliers in its EQE and EQS electric models. The investigation reveals that the Stuttgart manufacturer presented its vehicles as equipped exclusively with premium CATL cells, when in reality many models used batteries from Chinese supplier Farasis Energy. A practice of omission that perfectly illustrates the tensions between marketing communication and industrial realities in Mercedes' electric upmarket positioning.

"Four out of six EQE models use Farasis batteries, yet no commercial documentation mentioned it" — South Korea's Fair Trade Commission (KFTC)

When a fire exposes the convenient arrangements with truth

It took a tragedy for Mercedes' strategy of omission to unravel. In August 2024, a Mercedes EQE catches fire in an underground parking garage in Incheon, triggering a blaze that destroys 140 vehicles and forces the evacuation of a residential building. The post-fire investigation reveals that the batteries in question came from Farasis Energy — not CATL as all the star brand's commercial materials had suggested.

This revelation prompts the South Korean government to demand complete disclosure of battery suppliers from all manufacturers. It is within this context that the full scope of the deception orchestrated by Mercedes-Benz since May 2021 comes to light.

The art of selective communication according to Mercedes

The KFTC uncovers a particularly revealing document: in June 2023, Mercedes-Benz Korea distributes to its dealers an "electric vehicle sales guide" of remarkable elegance in its one-sidedness. This manual exclusively praises CATL, presented as "the global leader in market share" with "cutting-edge technological capabilities."

Farasis Energy? Nonexistent in this commercial primer. Yet since May 2021, Stuttgart knew exactly which models used which batteries. This communication strategy through omission effectively transformed sales teams into collateral victims of a brand policy endorsed at the highest levels.

Anatomy of a product mix with variable geometry

The architecture of this concealment reveals the full subtlety of Mercedes' industrial strategy. Of the six EQE sedan versions sold in 2023, four integrated Farasis Energy batteries. Only the EQE 350 4MATIC and AMG EQE 53 variants retained the prestige of CATL cells — a positioning that is obviously no accident.

For the EQS, the distribution follows similar logic: the entry-level EQS 350 model uses Farasis batteries, while higher-end versions and EQS SUVs preserve their standing with CATL. Ultimately, approximately 3,000 vehicles equipped with Farasis batteries were sold between June 2023 and August 2024 without their buyers being informed.

The burden of Farasis' track record

This opacity policy is rooted in the supplier's checkered history. In March 2021, just weeks before Mercedes launched its EQ models in South Korea, Farasis conducted a massive recall in China due to fire risks. A precedent that Stuttgart's marketing teams were apparently in no rush to share with their premium clientele.

The positioning gap between the two suppliers speaks for itself. CATL commands over 30% of the global market and equips all luxury manufacturers, while Farasis remains a second-tier player with less proven technology. According to our sources, this difference in standing largely explains Mercedes' reluctance to publicly stand behind this industrial choice.

Stuttgart fights back with its usual confidence

Facing this fine of 11.2 billion won, Mercedes-Benz Korea deploys its customary defense strategy. The manufacturer "respects the decision of the KFTC's plenary assembly" — a diplomatic courtesy formula — but says it is "firmly in disagreement with the commission's final decision." Translation: we will appeal.

Mercedes announces it will "take the necessary legal measures, including filing an administrative appeal" while hammering home that it has "provided the media and its customers with accurate and truthful information." A claim that deserves some qualification in light of established facts. The KFTC has moreover decided to refer the matter to prosecutors, targeting both the Korean subsidiary and the German headquarters Mercedes-Benz AG.

Toward a new era of transparency

This affair marks a turning point in the industry's transparency requirements, partic