A Korean consumer group says Tesla sold Full Self-Driving to owners whose cars can’t legally use it

A South Korean consumer group, Citizens United for Consumer Sovereignty, planned to file a complaint with the Korea Fair Trade Commission (KFTC) on Thursday, Nov. 5, accusing Tesla of selling Full Self-Driving to owners whose cars cannot legally use it. Reuters reported the filing plans on Nov. 4. The target is Tesla’s marketing of the software to buyers of Shanghai-built Model 3 and Model Y cars.

Save more, waste less: The Cool Down’s newsletter sends smart, simple changes that help you and the planet in your everyday life.

Subscribe to The Cool Down →

We may earn a commission if you sign up.

Tesla did not respond to Reuters’ requests for comment. The commission itself opened a probe into Tesla’s FSD advertising earlier this year and has already received written responses from the company.

Two factories, one trade agreement

The dividing line is where the car was built. Electrek’s account of the Reuters report says Model S, Model X and Cybertruck units made in U.S. factories and imported under the KORUS free trade agreement received FSD (Supervised) in Korea late last year, because that agreement recognizes American safety standards. Model 3 and Model Y cars come from Giga Shanghai, and no equivalent arrangement exists with China. Tesla has sold more than 170,000 Shanghai-built vehicles in Korea since 2023, and by Tesla’s own numbers about 99% of the cars it sold in Korea last year cannot run FSD, according to the group.

Tesla Korea country manager Seo Young-deuk told lawmakers that FSD works on about 20% of registered Teslas. A Korea Times report on the Oct. 8 National Assembly audit put the number of U.S.-made Teslas running supervised FSD at about 45,000 and noted that over 70% of Tesla Korea’s sales are China-made vehicles, the Model Y among them. Estimates of eligibility swing widely. Electrek’s Oct. 27 report on Korean police cites a data firm’s 20.7% figure from August and a lawmaker’s May data showing 2.4%.

Tesla registered 89,148 new vehicles in Korea from January to September, up 104.4% from a year earlier, so the pool of affected buyers keeps growing.

The remedies the consumer group wants from the KFTC

Choi Young-suk, who heads automotive issues at the group, said Tesla sold “an expensive driver-assistance system to mass-market buyers” who cannot use it. The complaint asks the KFTC for a temporary order stopping FSD marketing to ineligible cars, for fines, and for referral to state investigators. It cites a “coming soon” promotion last year and a demo video shot on Korean roads as examples of marketing aimed at every buyer rather than only eligible ones.

Money is part of the story. Tesla charged a one-time 9.043 million won (about $6,726) for FSD in Korea before switching in August to a 150,000 won (about $112) monthly subscription, Electrek reported. A Shanghai-built Model Y owner who paid for either option would be buying software that the transport ministry says does not comply with local rules.

A Seoul refund ruling and a ministry that says FSD breaks local rules

The legal backdrop is mixed. On Oct. 29 the Seoul Central District Court dismissed a refund suit by 88 Tesla owners, Reuters reported, finding that Tesla had not breached its contractual obligations. The court read the FSD option as not promising fully autonomous driving and held that delays tied to regulatory compliance were not Tesla’s responsibility. Judge Kim Seok-beom said, according to The Star’s account of the ruling, that Tesla had to deliver features that are technically feasible within domestic and international regulatory and legal limits. Plaintiffs’ lawyer Hwang Yoon Koo called the verdict flawed and argued FSD cannot work on the plaintiffs’ cars without replacing cameras and other hardware.

The ministry angle cuts the other way. The Ministry of Land, Infrastructure and Transport told a lawmaker that FSD does not comply with local safety rules, including the hands-on-wheel requirement, while current FSD versions allow hands-free driving if the cabin camera sees the driver watching the road, Electrek reported. At the Oct. 8 hearing Seo said Tesla had never formally asked the ministry to test FSD; Electrek says Tesla applied for certification roughly two weeks later.

Enforcement is running in parallel. Seoul police announced on Oct. 27 that 80 people had been booked for using aftermarket devices to switch on FSD in cars not approved for it, with 21 devices seized and penalties of up to two years in prison or a fine of up to 20 million won under the Motor Vehicle Management Act.

Tesla’s own response to the unlock devices began in April. The company started remotely detecting them and stripping FSD from affected cars, warned owners they would be fully liable for crashes and could lose warranty coverage, and permanently banned some Chinese owners from the software. An unnamed police official told Korea JoongAng Daily that safety risks were confirmed, including the chance of FSD misreading driving conditions.

The ministry told the Korea Times audit that it cannot block U.S.-made Teslas from FSD because no international governing standard exists, while Seo said Tesla would join an evaluation if the government set up a verification channel. The stakes are commercial as well as legal: Electrek notes that Tesla passed BMW this year to become Korea’s top imported car brand.

What remains open is the commission’s answer. No ruling on the temporary-order request had been reported as of Nov. 5, and Tesla has not publicly answered the allegations. The KFTC would be weighing the complaint while already reading the written replies the company has sent in its advertising probe.

This article was produced with the assistance of AI and reviewed by Morning Overview editors prior to publication.

Save more, waste less: Subscribe to The Cool Down →

We may earn a commission if you sign up.