The direct financial hit to Tesla is likely small, but the case adds to regulatory and reputational risk around Full Self-Driving, a product central to the company’s valuation story. A cease-and-desist order or fines in a fast-growing market would be a setback. Refund claims would be a bigger issue if they spread to other countries selling China-built cars. The dispute also highlights how much Tesla’s international software revenue depends on certification regimes it does not control, which matters as it pushes for approval in Europe. Investors will watch whether the regulator acts quickly and whether similar complaints emerge elsewhere.---Tesla’s South Korean boom was built on China-made cars, and a consumer group says the company sold their owners self-driving software they could never legally switch on.Summary:A consumer group plans to file a complaint on Thursday alleging Tesla misled South Korean buyers over Full Self-Driving, Reuters reportedOnly about 20% of Teslas registered in South Korea, those made in the US, can legally use the software99% of new Teslas sold in South Korea last year were China-made and ineligibleTesla charged about 9 million won (around $6,700) for the software before moving to a monthly subscription in AugustThe group seeks a cease-and-desist order, fines and a referral to state investigatorsThe regulator already opened a probe into Tesla’s advertising earlier this yearA consumer advocacy group alleges that Tesla misled tens of thousands of South Korean customers by marketing its Full Self-Driving software, even though the company knew the software could not legally be used in most of its cars sold there. The group plans to file a complaint on Thursday, Reuters reported.According to Reuters, which has seen the previously unreported complaint, Citizens United for Consumer Sovereignty will ask the Korea Fair Trade Commission to issue a temporary cease-and-desist order on marketing the software for ineligible vehicles. It will also seek administrative fines and a referral to state investigators. Tesla did not respond to requests for comment.At the centre of the dispute is where the cars are built. Tesla Korea’s country manager told a parliamentary hearing last month that the software can be used on only about 20% of Tesla vehicles registered in South Korea. Those are the US-built cars, which meet American safety standards recognised under a free trade agreement. Most Teslas sold in the country are made in China, where no such arrangement exists.Tesla has sold more than 170,000 Shanghai-built vehicles in South Korea since 2023, according to company data submitted to the National Assembly. Last year, 99% of new Teslas sold in the country could not legally use the software. For years, Tesla charged customers a one-off payment of about 9 million won, or roughly $6,700, before switching to a monthly subscription of about 150,000 won in August.The complaint alleges Tesla promoted the feature as coming soon and released a demonstration video filmed in South Korea, without clearly disclosing that only a small fraction of its cars could use it. The group’s automotive lead said Tesla had earned substantial revenue from selling a costly system that many buyers could not use at all.Regulatory scrutiny was already under way. A commission official said it opened a probe into Tesla’s advertising of the software earlier this year and has received written responses from the company. The transport ministry has said the software does not meet local safety rules, including a requirement for drivers to keep their hands on the wheel. Tesla applied for certification of China-made vehicles only in late October.The case comes as Tesla’s sales in South Korea surge. It overtook BMW this year as the country’s top imported car brand. This article was written by Eamonn Sheridan at investinglive.com.