Kia, Hyundai Agree To Pay $41.2M To 33 States & D.C. Over Fuel Economy Issues

Image courtesy of Van Swearington / (Van Swearington)

Hyundai and Kia agreed Thursday to pay $41.2 million to dozens of states four years after it was revealed that the carmakers overstated the fuel efficiency of certain vehicles. 

The settlement, reached between the carmakers and 33 states, along with the District of Columbia, puts an end to an investigation into the companies’ business practices related to fuel economy estimate adjustments.

The investigation, and now settlement, began in 2012 after Kia and Hyundai announced they would adjust and restate the fuel economy ratings for certain model year 2011 to 2013 vehicles that included overstated fuel efficiency figures.

Under federal law, auto manufacturers must conduct testing under mandatory protocols set by government regulators and use the resulting data from that testing to support applications demonstrating their vehicles’ conformity to those standards.

But the states alleged that the two carmakers used inflated and inaccurate data to estimate the mileage ratings displayed on window stickers for hundreds of thousands of vehicles sold across the country.

The EPA first discovered Hyundai and Kia’s alleged violations during audit testing in 2012. A subsequent investigation revealed that Hyundai’s and Kia’s testing protocol included numerous elements that led to inaccurately higher fuel economy ratings. In processing test data, Hyundai and Kia allegedly chose favorable results rather than average results from a large number of tests.

The companies, the states claimed, sought to capitalize on the misstated mileage estimates by placing them prominently in advertisements and other promotional campaigns during a time of high fuel prices. By doing this, the states alleged that Kia and Hyundai misled customers and wrongly influenced buying decisions.

Each state will get a portion of the $41.2 million settlement, according to the Missouri Attorney General’s office.

Thursday’s settlement comes two years after the Environmental Protection Agency hit the carmakers with $350 million in penalties for overstating fuel economy ratings in 1.2 million cars and SUVs. Of those funds, the carmakers paid a $100 million penalty, spent around $50 million to prevent future violations, and forfeited 4.75 million greenhouse gas emission credits valued at more than $200 million.

Prior to that settlement, Hyundai and Kia resolved similar allegations brought by customers, agreeing to pay $395 million.

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