S. Korean Watchdog Fines Tesla for False Claims: Shares Fall 4%
The antitrust regulator in South Korea fined Tesla $2.2 million for failing to provide accurate information regarding its cars’ short driving capabilities in sub-zero temperatures, according to Semafor. The report, which claims Tesla’s electric vehicles’ driving range is more than 50% lower during cold weather, sent the company’s shares 4% lower in premarket trading.
Tesla’s Driving Range 50% Lower in Cold Temperatures
South Korea’s antitrust watchdog imposed a $2.2 million fine on Tesla for providing inaccurate information about its electric cars’ driving range capabilities in lower temperatures. In addition, the regulator will fine Tesla 1 million won for failing to disclose enough information to users regarding its cancellation policy. Tesla is down 4% in premarket trading after the reports.
The Korea Fair Trade Commission (KFTC) said in a statement on Tuesday that Tesla falsely advertised the driving range and charging speed of its electric vehicles (EVs), “as well as their fuel-cost effectiveness compared to gasoline vehicles.” The regulator claims Tesla’s vehicles’ driving range is over 50% lower during cold weather compared to how they are promoted online.
According to Bloomberg, Tesla changed the advertisement on its Korean-language website in February when the KFTC opened an investigation into the automaker. Tesla did not respond to the KFTC’s remarks yet.
The world’s largest EV maker offers winter driving tips on its official website, including pre-conditioning the cars using external power sources and using the company’s Energy app to keep track of energy consumption. However, the carmaker does not mention the 50% loss of driving range in colder temperatures.
The move comes less than a year after South Korean non-profit Citizens United for Consumer Sovereignty said the driving range of the majority of EVs declines by up to 40% in sub-zero temperatures when batteries need to be heated. According to the organization, Tesla’s vehicles suffered the biggest driving range loss among EV makers, citing data from South Korea’s environment ministry.
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Tesla Delivered 40% More Vehicles in 2022, but Headwinds Persist
The penalty marks another in a series of blows for Tesla over the past year. The automaker has been dealing with multiple headwinds, including supply chain constraints, reduced output in China due to coronavirus waves, and slowing local demand, among other things.
These challenges are reflected in Tesla’s stock price, which has plummeted by around 70% in the past year. The decline has intensified since Musk acquired Twitter in October, with many Tesla investors criticizing the billionaire for being too occupied with his new role at the social media company.
Tesla delivered 1.31 million vehicles in 2022, according to the year-end vehicle production and delivery report. The figure marks 40% growth year-over-year, though still below analysts’ expectations.
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