Tesla, which climbed to No. 3 among imported brands by selling nearly 60,000 cars in the domestic market last year, is expanding its grip on the market with price cuts from the start of the year while continuing to sell options that cannot currently be used, sparking controversy. As the dispute grows, the Korea Fair Trade Commission is said to be looking into the matter.
The models at issue are the Model 3 and Model Y, produced in China and brought in. These models cannot use supervised Full Self-Driving (FSD) in Korea. Even so, Tesla says policy could change to allow future use and is selling the option in advance for nearly 10 million won. There has been no change to the sales policy even though customers who purchased the option in the past and have been unable to use it for years have filed lawsuits.
According to the imported car industry on the 22nd, Tesla Korea allows buyers of the Model 3 and Model Y to select the supervised FSD option within the Autopilot package. The option costs 9,043,000 won. Supervised FSD is a Level 2 Autonomous Driving feature that allows driving with hands off the steering wheel on the condition that the driver keeps eyes on the road.
The Model 3 and Model Y are models that still cannot use supervised FSD in Korea. Under the Korea-U.S. Free Trade Agreement (FTA), U.S.-made vehicles can use FSD domestically without restriction through a self-certification system even if their safety standards differ from Korea's. Since Nov. last year, Tesla Korea has applied supervised FSD to the U.S.-made Model S and Model X, and the Cybertruck.
However, the China-made Model 3 and Model Y follow European safety standards and therefore must obtain separate certification in Korea. Article 48 of the Road Traffic Act does not allow a driver to take hands off the steering wheel. Even so, Tesla Korea continues to sell the supervised FSD option, saying there is a possibility the Model 3 and Model Y will be able to adopt supervised FSD in the future.
Tesla's website guides that it "includes enhanced Autopilot features and, through future updates, will support the vehicle to drive itself on almost all roads with minimal driver intervention." It did not present a specific target timeline for introducing FSD.
Store employees are giving similar guidance. An employee at Tesla's Yeouido store in Seoul said, "Just as our government recognized U.S. standards, if it recognizes the European safety standards applied to China-made vehicles, you could use it as soon as tomorrow."
The employee said, "There are quite a few customers purchasing the supervised FSD option now, expecting regulations to be clearly eased," and added, "China-made Teslas are also entering Thailand, and regulations there have recently been eased." In Aug. last year, Tesla CEO Elon Musk noted regarding potential easing of FSD rules in Thailand that they were "awaiting approval."
However, the employee said, "No one knows when regulations will be eased, and refunds are difficult after purchase, so consumers should choose carefully."
Some consumers who bought the Model 3 and Model Y believing supervised FSD would be introduced, following Tesla Korea's guidance, are seeking compensation. In Dec. 2024, 98 Tesla owners filed a lawsuit against Tesla Korea for return of the purchase price, and disputes are ongoing.
In response, Tesla Korea is said to be resisting the owners' demands for compensation on the grounds that there was no commitment to a specific timeline for FSD application and that it is prepared to apply it at any time in Korea depending on policy changes by the authorities.
A Tesla owner said, "I cannot understand why they are selling an option that cannot be used due to current regulations without any agreement on a specific provision date."
The Korea Fair Trade Commission is also said to be examining whether Tesla Korea's actions violate the Act on Fair Labeling and Advertising. This follows a complaint filed on the national petition portal alleging that Tesla Korea is engaging in false advertising to induce purchases of the supervised FSD option. If it is found that Tesla Korea violated the labeling and advertising law, the Korea Fair Trade Commission (FTC) can impose a penalty surcharge of up to 2% of related sales or up to 500 million won.
Tesla Korea's addition from this year of the notice, "Full Self-Driving (supervised) is not a feature that applies to all vehicles and applies only to certain eligible vehicles," when selecting the supervised FSD option for the Model 3 and Model Y also appears to reflect awareness of such Korea Fair Trade Commission probes. However, it still does not explicitly state that the Model 3 and Model Y are not eligible for the supervised FSD option.
Kim Pil-su, a professor in the Department of Future Automobiles at Daelim University, said, "Tesla Korea's actions can be interpreted as aiming to amplify interest in Tesla through 'false hope' that supervised FSD will be introduced in the future," and added, "Consumers should scrutinize product information more carefully to avoid buying in haste and being disappointed."