Tesla faces fines from Denmark due to alleged deceptive advertising tactics

📰 Business Chronicle

commented by you

Denmark's consumer watchdog, the Consumer Ombudsman, has slapped US electric vehicle (EV) titan Tesla with a fine for deceptive marketing practices. Despite the penalty, Tesla could have faced a much heavier fine based on the new rules.

Tesla's Danish branch is on the hook for a 190,000-krone fine ($27,000) for misleading ads concerning vehicle sales and financing, as confirmed by the Ombudsman's statement.

The snafu stems from Tesla's failure to divulge registration taxes, fees for documentation, and delivery expenses in the prices it advertised in 2019. Additionally, the company didn't provide a proper example of its financing offers' calculations.

Consumer Ombudsman Torben Jensen emphasized the importance of providing consumers with all necessary information for significant decisions, such as purchasing a car or taking out a loan, to allow them to make well-informed choices.

If Tesla had repeated the same infraction in today's context, the penalty would have been much steeper, as it would have been based on the company's turnover. Back in 2019, Tesla Motors Denmark, the Danish subsidiary, reported a turnover of approximately 1.2 billion kroner. With this, the potential fine could have ranged from 500,000 to 10.2 million kroner.

Moreover, the Danish Consumer Ombudsman has aggressively tackled misleading environmental claims (greenwashing) since the 2022 rule changes. Danish beverage company Royal Unibrew was fined 4 million DKK ($617,000) for falsely claiming CO₂ neutrality on its product packaging, failing to disclose that neutrality was partially achieved through carbon offsetting. This penalty is the largest greenwashing fine in Denmark and demonstrates the severe consequences companies face for misleading eco marketing under the updated rules[1].

The Danish Consumer Ombudsman clearly states that all CO₂ neutrality claims should transparently disclose if neutrality is achieved through carbon offsetting. Any omission of this information constitutes a violation of the Danish Marketing Act[1].

In essence:

Companies operating in Denmark, including Tesla, face hefty penalties for misleading marketing under current regulations, as evidenced by the 4 million DKK fine for Royal Unibrew's greenwashing[1].
Tesla's Danish counterpart was fined 190,000 DKK for obfuscating pricing information in marketing materials[3].
Since the 2022 rule changes, claims of CO₂ neutrality must be transparent about the method of achievement to comply with the Danish Marketing Act[1].

These penalties highlight the stringent legal obligations and potential financial repercussions for companies in Denmark, including Tesla, if their marketing practices mislead consumers under the existing framework.

engaging with the community:Join the conversation below, where you can share your views, experiences, and any questions or suggestions for our journalists. Reach out to us at news@our website. Please remember to keep comments civil, constructive, and relevant, and don't forget to read our terms of use before participating.

Log in to leave a comment

More interesting reads:[url to related articles]

The fine of 190,000 kroner that Tesla's Danish branch received for deceptive advertising practices in the automotive industry might have been much smaller if it had been based on the company's current turnover, as revealed by the Consumer Ombudsman.
In the world of finance and business, companies operating in Denmark, such as Tesla, should take caution when engaging in marketing practices, as adherence to transparent pricing and eco-marketing regulations can significantly impact their financial standing, just as evidenced by the 190,000 kroner fine Tesla received and the 4 million DKK fine imposed on Royal Unibrew for Greenwashing.

Tesla faces fines from Denmark due to alleged deceptive advertising tactics