Tesla, Inc. (NASDAQ:TSLA) has seen a slew of vehicle recalls in the U.S., and the automaker is now facing regulatory scrutiny in South Korea.
What Happened: Tesla is being taken to task by South Korea's Fair Trade Commission for exaggerating the performance of its EV batteries sold in Korea, local news agency Yohnap reported.
The agency alleges that Tesla has advertised on its website that its major vehicle models, including the Model 3 vehicle, have a range of over 528 km on a single charge.
When the temperature drops below freezing or while driving on a highway, the range falls in a real world scenario, the regulator said.
The regulator has sent a review report to Tesla, which contains its views on potential sanctions, including fines for violating the "Labelling and Advertising Act."
Related Link: Tesla's January Sales In China Slip Back From December's Record: What Investors Need to Know
On another note, the Fair Trade Commission is contemplating levying a fine on Tesla for not returning the reservation amount of 100,000 won ($84) to individuals if they choose to cancel their bookings, Yohnap said.
Why It's Important: Tesla is a global leader in EV manufacturing. Although it commands a sizeable share in the market, there is no denying of the fact that competition is breathing down its neck. Traditional automakers have all charted out ambitious EV strategies to partake in the EV opportunity.
Against the backdrop, quality issues as well as regulatory backlashes do not bode well for Tesla.
Tesla shares were advancing 4.67% to $916.69.
