South Korea's consumer watchdog is taking aim at Tesla's marketing of its Full Self-Driving (Supervised) feature, arguing that the company sold a product most of its local customers can't actually use. A consumer group plans to file a complaint with the Korea Fair Trade Commission (KFTC) on Thursday, according to reports.
The issue centers on Tesla's paid driver-assistance software, which the company has long pitched as a premium add-on. In South Korea, Tesla charges 9.043 million won upfront for the feature, or 150,000 won a month since August. But Tesla Korea's Seo Young-deuk recently told lawmakers that the feature is legally usable on only about 20% of registered Teslas in the country—mainly US-made vehicles.
That means the vast majority of Tesla owners in South Korea, particularly those with China-made cars, may have paid for a feature they can't legally activate on public roads. The consumer group's complaint argues that Tesla's marketing and sales practices misled buyers.
Why the legal gap exists
Full Self-Driving (Supervised) is Tesla's advanced driver-assistance system that can handle many driving tasks but still requires a human driver to stay alert and ready to take over. It's not fully autonomous, despite the name. In many markets, including South Korea, regulators have strict rules about where and how such systems can be used.
The legal usability gap appears to stem from differences in how Tesla configures its vehicles for different markets. Cars built in China, which make up a significant share of Tesla's sales in South Korea, may not be equipped with the hardware or software versions that meet local regulatory requirements. As a result, even if a driver pays for the feature, the car may not be able to use it legally on Korean roads.
This isn't the first time Tesla's FSD marketing has drawn scrutiny. Regulators in other countries have also questioned whether the company's claims about the system's capabilities are accurate. In the US, for example, authorities have investigated whether Tesla's use of the term "Full Self-Driving" is misleading, given that the system still requires driver supervision.
What this means for Tesla's business
For Tesla, the complaint adds another layer of regulatory risk in a key Asian market. South Korea is a relatively small but affluent market for electric vehicles, and Tesla has faced increasing competition from local brands like Hyundai and Kia, as well as other global players.
The company's sales in the region have been mixed. While Tesla's Shanghai deliveries rose 10.3% in October, they dipped sharply from September, and the company's performance in Europe has shown a worrying split between Nordic markets and the rest of the continent. In South Korea, the KOSPI has been volatile, with dip buyers stepping in recently, but the broader economic backdrop remains uncertain.
If the KFTC finds that Tesla misled consumers, the company could face fines, corrective orders, or other penalties. That would not only hit Tesla's finances but also its reputation in a market where trust is crucial for EV adoption.
What it means for investors
For everyday investors, this story is a reminder that Tesla's growth story isn't just about sales numbers—it's also about regulatory and legal risks. FSD is a key part of Tesla's strategy, both as a revenue stream and as a potential future driver of autonomous ride-hailing services. Any setback in one market could have ripple effects on investor sentiment.
However, it's important to keep this in perspective. South Korea is not Tesla's largest market, and the complaint is just that—a complaint. The KFTC has not yet ruled on the matter. Still, the episode highlights how Tesla's aggressive marketing of FSD can create liabilities, especially when local regulations lag behind the company's ambitions.
Investors should also watch how Tesla responds. The company has often defended its FSD marketing, arguing that the system is safe and that drivers are informed of its limitations. But if regulators in multiple countries start cracking down, Tesla may need to adjust its messaging or even its pricing strategy.
For now, the immediate impact on Tesla's stock is likely to be limited. But the longer-term question is whether Tesla can navigate the patchwork of global regulations while maintaining its reputation as a leader in driver-assistance technology. As consumer confidence in the US shows signs of stabilizing, and as Tesla continues to expand its global footprint, these regulatory challenges are unlikely to disappear.
In the meantime, South Korean Tesla owners who paid for FSD may be left wondering whether they got what they paid for. The consumer group's complaint could be the first step toward getting answers—and possibly compensation.
