Filed under: Government/Legal, Hyundai, Kia, Earnings/Financials
This amount includes $100-million in civil penalties, the largest such fines in EPA history.
Hyundai and Kia are getting more than a slap on the wrist for overstating the fuel economy of an estimated 1.2-million vehicles in their 2011-2013 model ranges. The Environmental Protection Agency, the Department of Justice and the California Air Resources Board are hitting the automakers with collective penalties valued at around $300 million for Clean Air Act violations. This amount includes $100-million in civil penalties, the largest such fines in EPA history. Specifically, Hyundai is paying a $56.8 million penalty and relinquishing 2.7-million greenhouse gas emissions credits. Kia is paying $43.2 million in penalties and giving up 2.05-million credits.
Those emissions credits are estimated to be worth around $200 million by the EPA, and the agency is also requesting a further $50-million investment to prevent future Clean Air Act violations from the automakers. CARB will receive $6,343,400 of the $100 million settlement.
Hyundai says that it is forming “an independent certification test group” to supervise testing, training and reporting. The automaker is also auditing its 2015-2016 model-year vehicles to check their accuracy. Hyundai and Kia previously announced owner compensation programs for the differences in fuel economy ratings and Hyundai tells Autoblog that it has since settled all related consumer lawsuits.
This settlement comes in reaction to the Korean brands’ infamous fuel-economy markdowns in 2012. The EPA claims that over the life of these vehicles, they will add 4.75-million metric tons of CO2 more than the EPA had certified, hence the credit penalties it is assessing. “In processing test data, Hyundai and Kia allegedly chose favorable results rather than average results from a large number of tests,” said the agency in its statement. On its end, the regulator is planning to issue more specific rules on economy testing for all automakers.
For its part, Hyundai continues to cite not only a “data processing error related to the coastdown testing method” that’s part of the EPA test schedule, but also vagueness within certain parameters of the government-mandated testing (including things like a wide allowable temperature spectrum and tire condition during testing) for inconsistencies in fuel-economy measuring.
Scroll down for Hyundai, Kia and the EPA’s statements of the settlement. There’s also a helpful video from Hyundai explaining more about how fuel economy is tested, including detailing some of the issues it has with the EPA’s testing methodology. For its part, Kia has posted more details about its side of the settlement on the Frequently Asked Questions portion of its Kia MPG Info website.
Continue reading Hyundai-Kia fuel-economy errors trigger $300M in federal penalties [w/video]
Hyundai-Kia fuel-economy errors trigger $300M in federal penalties [w/video] originally appeared on Autoblog on Mon, 03 Nov 2014 12:58:00 EST. Please see our terms for use of feeds.