Tesla Faces Subsidy Cancellation Risk In South Korea Due To Battery Defects

According to foreign media reports, Tesla is facing new difficulties in the Korean market. Recent reports indicate that 4,500 of its electric vehicles in Korea have serious battery defects, which may result in them being unable to continue receiving electric vehicle subsidies from the Korean government.

According to a report by the Korea Central Daily, a large number of Tesla vehicles are experiencing battery issues. The core of the problem points to the "BMS_a079 error" fault code, which has troubled nearly 4,500 Tesla owners in Korea. This fault has appeared in both Model 3 and Model Y vehicles, triggering safety protocols that limit the maximum charging capacity of the vehicle's battery to 50%, significantly reducing the vehicle's range and causing great inconvenience to users' daily commutes.

Image Source: Tesla

This issue has been ongoing for some time, primarily affecting the 2021 Tesla models, with a total of 4,351 affected vehicles reporting 4,637 faults.

It is worth noting that in hundreds of cases, the issue has persisted even after battery replacements, with some users attributing this to Tesla using refurbished battery packs instead of new ones.

In most cases, Tesla covers repair costs within the warranty period. However, many involved vehicles exceeded the mileage limit, resulting in warranty invalidation, and owners had to pay a high repair fee of over 30 million Korean won (approximately $22,000) out of pocket to restore normal vehicle use. This move has caused strong dissatisfaction among the Tesla owner community in South Korea.

Currently in South Korea, up to 22% of 2021 Model Y and 12% of 2021 Model 3 vehicles are affected. Such a high failure rate leads consumers to believe that this is not normal wear and tear, and Tesla should implement a recall for the related defects.

The South Korean civil organization "Citizens United for Consumer Sovereignty" is now demanding that Tesla Korea take responsibility for this issue. They are calling for Tesla to conduct a full recall of all affected vehicles and for the South Korean Ministry of Land, Infrastructure and Transport to conduct a thorough investigation to identify the root cause of the problem.

This situation has also attracted the attention of the South Korean government. The country's Ministry of Environment has issued a stern warning to Tesla: the issue must be resolved, or the company may lose its eligibility for generous government subsidies, which have been a key driving force behind the popularity of electric vehicles in South Korea.

A South Korean government official in charge of the electric vehicle subsidy program stated, "We have requested a clear response from Tesla Korea on this issue, but have not yet received any reply. If the company continues not to respond, we will have no choice but to consider suspending subsidies. We cannot provide public funding subsidies for vehicles that harm consumer interests."

Currently, the purchase subsidy for electric vehicles in South Korea can reach up to 5.8 million won (approximately 3,950 USD), and this incentive policy is a key factor in making South Korea a crucial market for Tesla globally.

Currently, Tesla has established a solid foothold in the South Korean market, becoming the third best-selling imported car brand in Korea in 2024. Recently, Tesla has maintained its position at the top of the sales chart for imported passenger cars in Korea for three consecutive months, solely based on electric vehicle products, breaking the previous dominance of the imported car market by Mercedes-Benz and BMW.

However, the battery failure issue and the potential risk of losing subsidy eligibility may impact Tesla's existing market share in South Korea.