The Environmental Protection Agency and the U.S. Justice Department just settled with Hyundai and Kia to the tune of $100 million, the largest Clean Air Act penalty ever assigned. The fine stems from claims that the Korean carmakers sold 1.2 million cars in the U.S. with overly optimistic fuel-economy ratings. The EPA contends that the vehicles sold under the inaccurate fuel-mileage ratings contributed more than 5.2 million unaccounted tons of greenhouse gases beyond what the companies estimated.
The settlement also requires Hyundai to spend $50 million to create an independent fuel-economy certification group. In addition, the companies will forfeit the carbon credits associated with the unaccounted emissions of the misrated vehicles. Those carbon credits, which can be used to offset manufacture of higher-pollution vehicles or sold to other manufacturers, have an estimated market value of over $200 million, according to the EPA.
The agency discovered in 2012 that the two brands used fuel-economy testing protocols that "included numerous elements that led to inaccurately higher fuel-economy ratings." The agency goes on to say that Hyundai and Kia "chose favorable results rather than average results from a large number of tests." The overstated fuel-economy ratings had affected cars produced by Hyundai Motor Group reaching back to 2010. The company blamed the optimistic fuel-economy ratings on "procedural errors."
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Hyundai Motor Group, which owns roughly 33 percent of Kia, has already committed up to $395 million toward settling class-action lawsuits stemming from the inaccurate fuel-economy ratings. Bloomberg reports that, in the wake of the EPA's original investigation, window-sticker fuel-economy ratings dropped by as much as 6 mpg.
"Businesses that play by the rules shouldn't have to compete with those breaking the law," said EPA Administrator Gina McCarthy in a statement. "This settlement upholds the integrity of the nation's fuel-economy and greenhouse-gas programs and supports all Americans who want to save fuel costs and reduce their environmental impact."
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At an EPA news conference, Attorney General Eric Holder said "I believe this will send an important message to automakers around the world that they must comply with the law."
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This story originally appeared on roadandtrack.com via The New York Times.
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