Tesla is facing allegations of misleading tens of thousands of customers in South Korea by marketing its Full Self-Driving (Supervised) software to buyers whose vehicles are not legally eligible to use the technology.
According to a complaint prepared by consumer advocacy group Citizens United for Consumer Sovereignty, Tesla promoted the driver-assistance system despite knowing that most of its vehicles in South Korea could not receive legal approval to operate it.
The group plans to submit the complaint to the Korea Fair Trade Commission (KFTC) on Thursday, seeking action over what it describes as deceptive marketing practices.
Tesla has marketed Full Self-Driving (Supervised) to prospective buyers in South Korea for several years, often collecting a one-time payment of 9.043 million won, equivalent to approximately $6,726.
Only a Small Share of Tesla Vehicles Eligible
Tesla Korea country manager Seo Young-deuk told South Korean lawmakers last month that the FSD system could be used in approximately 20% of Tesla vehicles registered in the country.
Those vehicles were manufactured in the United States and meet US vehicle-safety standards recognised by South Korea under a free trade agreement, according to the forthcoming complaint reviewed.
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However, most Tesla vehicles sold in South Korea are manufactured in China, where no equivalent agreement applies.
Tesla only recently began the certification process for FSD in China-manufactured vehicles, despite charging customers for the software for more than three years.
A KFTC official confirmed that the agency had launched an investigation earlier this year into Tesla’s advertising of FSD. The regulator has also received written responses from the company but declined to disclose further details.
Consumer Group Seeks Regulatory Action
The exact number of South Korean customers who purchased FSD for vehicles that cannot legally use the system remains unclear.
However, Tesla has sold more than 170,000 Shanghai-manufactured vehicles in South Korea since 2023, according to company data submitted to the country’s National Assembly.
Choi Young-suk, who leads automotive issues at Citizens United for Consumer Sovereignty, accused Tesla of generating substantial revenue from customers who could not use the expensive software.
“Tesla generated substantial revenue by selling an expensive driver-assistance system to mass-market buyers who cannot use it for even a single day,” Choi said.
The consumer group said Tesla continued promoting FSD as sales of China-manufactured vehicles increased sharply. Its complaint cites data showing that sales of FSD-incompatible Teslas manufactured in China increased more than fivefold between 2023 and 2024.
According to the data submitted to the National Assembly, 99% of new Teslas sold in South Korea last year could not legally use FSD.
Tesla’s FSD Advertising Under Scrutiny
The complaint alleges that Tesla promoted FSD as “coming soon” last year and published a demonstration video filmed in South Korea without clearly explaining that only a limited proportion of its vehicles could legally use the technology.
The group argues that Tesla knew about the regulatory restrictions but continued marketing the software to customers across the country.
During an October 8 parliamentary hearing, Tesla Korea manager Seo said the company had not formally requested FSD testing from South Korea’s transport ministry. Tesla applied for certification approximately two weeks later.
The transport ministry has said FSD does not comply with certain local vehicle-safety requirements, including rules requiring drivers to keep their hands on the steering wheel, according to a statement provided to a lawmaker and reviewed.
Citizens United for Consumer Sovereignty has asked the KFTC to issue a temporary cease-and-desist order preventing Tesla from marketing FSD to ineligible vehicle owners. It has also called for administrative fines and a referral to state investigators.
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The controversy follows a separate legal challenge by Tesla owners seeking refunds for the FSD option, which was not activated in South Korea until late last year.
A Seoul court dismissed the lawsuit last month, rejecting the owners’ argument that Tesla had failed to provide the driver-assistance system.
The court said regulatory and legal restrictions had limited the company’s ability to introduce additional functions.
Despite its name, Full Self-Driving (Supervised) is not an autonomous driving system and requires active human supervision.
Tesla CEO Elon Musk has repeatedly promised that the company’s vehicles would eventually become fully driverless, while the company continues efforts to expand FSD availability beyond North America, including in Europe.
Tesla’s growing presence in South Korea has added significance to the dispute. The company surpassed BMW this year to become the country’s leading imported-car brand, according to South Korean import data.
Tesla sold FSD through one-time payments for years before activating the service in the country last year. In August, it shifted to a monthly subscription model costing 150,000 won, or approximately $112.
The KFTC investigation could determine whether Tesla’s marketing practices violated South Korean consumer protection rules.
