Mercedes-Benz Korea's EQE Accused of Mismatched Battery Branding; 53 Owners Launch Class Action

On July 2, the Korea Consumer Dispute Settlement Commission decided to initiate a collective dispute mediation procedure against Mercedes-Benz Korea. The mediation request was jointly filed by 53 consumers and concerns certain imported EQE electric vehicle models sold by Mercedes-Benz Korea since June 2023, including the EQE 350+, EQE 350 4MATIC, EQE 53 4MATIC+, and EQE 500 4MATIC SUV. Consumers allege that they were informed at the time of purchase that their vehicles were equipped with CATL (Contemporary Amperex Technology Co. Limited) batteries, but in reality, the vehicles were fitted with batteries manufactured by Farasis Energy. This dispute is linked to an explosion and fire incident involving an EQE 350+ in an underground parking lot of an apartment complex in Cheongna, Incheon, in August 2024, after which it was discovered that the actual battery supplier differed from what had been advertised. In March 2024, the Korea Fair Trade Commission (KFTC) determined that Mercedes-Benz had concealed the true battery source in its business documentation, constituting false labeling, and imposed a fine of KRW 11.239 billion. The KFTC also referred both Mercedes-Benz Korea and its headquarters to prosecutors for further investigation. It is estimated that approximately 3,000 affected vehicles were sold during the violation period, generating sales revenue of about KRW 281 billion. The Dispute Settlement Commission concluded that more than 50 consumers suffered damages and that the factual and legal issues involved are largely identical, satisfying the criteria for collective mediation. Under South Korea’s Framework Act on Consumers, the Commission will publish a notice on its official website and in major daily newspapers for at least 14 days. Consumers who purchased a vehicle through a Mercedes-Benz Korea dealer between June 8, 2023, and August 12, 2024, and were told their vehicle was equipped with a CATL battery may submit supporting documentation to join the mediation process.