Hyundai & Kia Fined $360 Million For Faulty MPG Claims (None Of Which Will Fund Electric Cars)

January 22, 2015

Hyundai and Kia have agreed to a massive $360 million fine, following a two-year-long investigation of the Korean automakers by the U.S. Environmental Protection Agency. Added to the $395 million that Hyundai and Kia have paid to vehicle owners, the companies will have forked over $755 million for misstating fuel economy in 13 models.

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RECAP

The fiasco began in the fall of 2012, when the EPA identified over a dozen Hyundai and Kia vehicles from model-years 2011, 2012, and 2013 that failed to meet their stated fuel economy. The underachievers included the Hyundai Accent, Azera, Elantra, Genesis, Santa Fe, Sonata Hybrid, Tucson, and Veloster, and the Kia Optima Hybrid, Rio, Sorento, Soul, and Sportage. Most were found to earn between one and six miles less than their advertised economy.

As the EPA probe began to garner headlines, Hyundai and Kia owners filed a class action lawsuit, seeking $775 million in damages. The automakers eventually gave in to those demands via a $395 million program that either paid owners for the additional funds they spent on gas or provided a credit that owners could put toward a new Hyundai or Kia. The program affects roughly 600,000 U.S. Hyundai owners and 300,000 Kia owners in the U.S.

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THIS WEEK

The EPA wrapped up its investigation of Hyundai and Kia last fall, and this week, U.S. District Judge Tanya Chutkan approved the settlement between the agency and the automakers. That settlement consists of a $360 million fine for violations of the Clean Air Act, which breaks down as follows:

  • A $100 million civil penalty;
  • The loss of $210 million worth of federal credits for greenhouse gas emissions;
  • A $50 million sum that will be earmarked for auditing the companies' vehicles to make sure that such problems don't arise again in the future

State attorneys general from Connecticut, Maryland, Massachusetts, New Mexico, New Jersey, New York, Oregon, Rhode Island, and Vermont had asked Chutkan to allocate at least $50 million of the Hyundai/Kia settlement to promote the development and sale of electric cars. However, that would've required more negotiations between all parties, which could've jeopardized the entire settlement. Chutkan agreed that the attorneys generals' intentions were noble, but determined that the risk of botching the deal was too high.

For additional details about Hyundai and Kia's reimbursement plans for owners, visit HyundaiMPGInfo.com or KiaMPGInfo.com.

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