Tesla faces FSD marketing complaint in Korea

A South Korean consumer advocacy group plans to file a complaint with the Korea Fair Trade Commission (KFTC) alleging that Tesla misled tens of thousands of customers about its paid Full Self-Driving (Supervised) driver-assistance software. The group claims Tesla marketed and sold FSD while knowing that the system cannot be legally used in most of its vehicles operating in South Korea.

The complaint targets Tesla Korea’s promotion of FSD as a feature available to mass-market buyers, even though the technology is said to be legally usable on only a small fraction of the local fleet. The KFTC, which also oversees antitrust matters, has not previously received this specific complaint, but it is already examining Tesla’s advertising of the system.

Tesla Korea country manager Seo Young-deuk told lawmakers in parliamentary testimony that FSD can be legally used on about 20% of Tesla vehicles registered in South Korea. These are vehicles manufactured in the United States that meet US vehicle-safety standards recognized by South Korea under a free trade agreement, according to the forthcoming complaint.

Most Tesla vehicles in South Korea are manufactured in China, where there is no equivalent safety-standards recognition. Tesla has sold more than 170,000 Shanghai-produced vehicles in South Korea since 2023, based on data the company provided to the National Assembly. It remains unclear how many owners of these China-made vehicles have paid for FSD even though the feature cannot be legally used on those cars.

A KFTC official has said the agency opened a probe earlier this year into Tesla’s advertising of FSD and has received written responses from the company. Separately, the transport ministry has informed a lawmaker that FSD does not comply with local safety rules, including requirements for drivers to keep their hands on the steering wheel and maintain control.

Tesla Korea’s Seo testified on October 8 that the company had not formally requested FSD testing from the transport ministry at that time. Tesla applied for certification two weeks later, starting the process to obtain approval for use of FSD on China-made vehicles after having charged customers for the software for more than three years.

The consumer group alleges that Tesla promoted FSD last year as “coming soon” in South Korea and shared a demonstration video filmed in the country without clearly disclosing that the system could only be used on a small fraction of the vehicles being sold. The complaint states that Tesla continued marketing FSD even as sales of ineligible China-manufactured vehicles surged in the local market.

The advocacy organization accuses Tesla Korea of deceptive marketing and asserts that the company generated substantial revenue by selling an expensive driver-assistance system to mass-market buyers who could not use it legally. It is asking the KFTC to impose a temporary cease-and-desist order on FSD marketing for ineligible vehicles, levy administrative fines, and refer the matter to state investigators.

Tesla has for years offered FSD in South Korea via one-time payments and, since August, has added a subscription model priced at 150,000 won per month. It was previously offered for an upfront price of 9.043 million won.

For Tesla, FSD is positioned as software that can turn a vehicle sale into ongoing, higher-margin revenue through upgrades and subscriptions. The dispute in South Korea raises the possibility of tighter limits on how such software options are marketed, as well as potential fines or refund pressure if regulators conclude that paid features cannot be delivered legally on much of the local fleet.