Tesla (NASDAQ:TSLA) will be fined 2.85 billion won ($2.2 million) by South Korea’s antitrust bureau for exaggerating the driving range of its electric vehicles (EVs) on Tesla’s official South Korean website.
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The company failed to present the correct information about the actual driving range of its EVs in cooler regions or on a single charge. It also exaggerated the comparison of its fuel cost-effectiveness to gasoline-run vehicles, as well as the performance of its Superchargers (Tesla’s fast-charging technology). The local Tesla website displayed the exaggerated numbers from August 2019 until recently.
The Korea Fair Trade Commission (KFTC) pointed out that when the weather turns cold, the driving range of Tesla’s EVs falls by around 50.5% from the range Tesla advertised.
The penalty for Tesla comes a year after the South Korean watchdog fined German carmaker Mercedes-Benz (MGBAF) and its Korean unit 20.2 billion won for advertising misleading information on the gas emissions of its diesel cars.
The development adds to the recent demand woes that Tesla is facing amid discouraging actions by Elon Musk, inflationary pressures, and high interest rates.
Is TSLA a Good Buy?
Tesla stock has shed about 69% of its value over the past year after facing several supply and demand headwinds amid rising COVID-19 cases in China. Nevertheless, analysts are not too bearish about Tesla stock. Based on 18 Buys, 10 Holds, and two Sells, the consensus rating for TSLA stands at Moderate Buy. The average price target of $267.07 implies a 116.8% upside potential from the current price level.
