Two years ago, after an EPA investigation spurred by consumer complaints, Hyundai and Kia announced they would reimburse owners of about 900,000 vehicles for misstated fuel economy ratings; today the Department of Justice is leveling a related $100 million civil penalty against the Korean automakers. They have also agreed to spend approximately $50 million on programs to prevent future violations as well as forfeit 4.75 million greenhouse gas emission credits that the companies previously claimed. The EPA estimates the credits, which can be used to offset emissions from less fuel-efficient vehicle models, to be worth more than $200 million.
Related: Hyundai, Kia to Pay 900,000 Owners for Bad MPG Estimates
According to the EPA, the fine is the largest in Clear Air Act History, which the automakers violated when they sold close to 1.2 million vehicles that will emit approximately 4.75 million metric tons of greenhouse gases in excess of what the automakers certified to EPA.
The discrepancy stems from the erroneous coastdown procedures that resulted in the automaker's adjustment of the fuel economy ratings of around a quarter of its model-year 2011-2013 vehicles; combined city/highway ratings were reduced by 1-2 miles per gallon, bringing them in line with the EPA's numbers.
Today's fine does not affect consumers except to put a cap on the saga. Affected owners have already been reimbursed via debit card to cover the additional fuel costs drivers will incur, plus 15 percent extra apology cash. "This really is nothing more than a conclusion of what started two years ago," Hyundai spokesman Jim Trainor told Cars.com. "And at the time, the EPA looked at this and said, 'We're probably going to fine you guys … ' It's almost good news, because we knew this was coming. We'll pay the penalty and be done with this once and for all."
In addition to the fine, Hyundai has agreed to form an independent certification test group to oversee and monitor fuel-economy testing and reporting as well as continue to audit model-year 2015-16 vehicles to ensure accurate fuel economy ratings.
"We're going to be working with the EPA to make sure that the guidelines are easy to follow. … So we're getting slapped on the wrist here [but] we did have an error, and we fixed this. It's not going to happen again. We're paying a penalty and it's time to move on," Trainor said.
This isn't the first time the automaker has been fined by the government. In September, it agreed to pay $17.35 million to the National Highway Traffic Safety Administration for failing to report in a timely manner a safety defect on the brakes of the 2009-12 Genesis.
Hyundai is not the only automaker called out for discrepant fuel economy ratings; last summer, Ford announced it's revising fuel economy ratings for six models and compensating owners of about 200,000 affected vehicles. The government has yet to weigh in on a related fine for Ford, but the Justice Department is putting other automakers on notice:
"This unprecedented resolution with Hyundai and Kia underscores the Justice Department's firm commitment to safeguarding American consumers, ensuring fairness in every marketplace, protecting the environment, and relentlessly pursuing companies that make misrepresentations and violate the law," Attorney General Eric Holder said in a statement. "This type of conduct quite simply will not be tolerated. And the Justice Department will never rest or waver in our determination to take action against any company that engages in such activities —whenever and wherever they are uncovered."
Cars.com photo by Evan Sears
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