Hyundai Fined for Fudged Fuel Efficiency Estimates | Edmunds

Hyundai Fined for Fudged Fuel Efficiency Estimates

WASHINGTON — In a move that should help bolster consumer confidence in the reliability of EPA fuel efficiency estimates, the regulatory agency has slapped Hyundai Motor Co. with a record $100 million civil fine for inflating the numbers it reported for 13 Hyundai and Kia models from the 2012 and '13 model years.

The fine, announced as part of a federal Clean Air Act settlement agreement Monday, sends a strong signal to all automakers to make sure their self-reported EPA mileage estimates are accurate because there's a steep price to pay if they are off.

The settlement ended a nearly two-year EPA probe into Hyundai's fuel efficiency testing methods. In addition to the fine, Hyundai agreed to surrender federal greenhouse gas emissions credits worth more than $200 million at today's market prices (the credits are traded among automakers) and to revamp its testing procedures to avoid further errors.

Additionally, the automaker agreed to establish a fact-checking unit in the U.S. to independently verify the fuel efficiency numbers generated by Hyundai and Kia engineers here and in South Korea, where the company is headquartered and where most of its vehicles are made. The company estimated the cost of the program — which must run through 2017 — at $50 million.

The EPA estimated that Hyundai and its Kia subsidiary jointly sold almost 1.2 million cars in the U.S. that carried EPA-estimated fuel economy labels overstating the actual fuel economy. While most of the numbers were inflated by only 1-2 mpg, several were off by as much as 6 mpg.

In addition to Monday's settlement, Hyundai Motor Co. agreed last year to pay up to $395 million to settle lawsuits brought by consumers who believed they'd been falsely lured into buying a Hyundai and Kia because of the inaccurate mileage claims, or that the inflated fuel efficiency numbers diminished the expected resale value of their vehicles.

The EPA says the violations resulted in Hyundai and Kia cars and SUVs emitting 4.75 million more tons of greenhouse gases than were tallied for the companies. The emissions tally is based on pounds of greenhouse gases per gallon of fuel burned.

While regulators pulled no punches in stating that the automakers broke the law, Hyundai said in a statement that the inflated numbers were the result of its interpretation of poorly worded testing regulations, implying that the fault lay with the EPA.

Since the Hyundai and Kia fuel economy inflation was discovered in 2012, the EPA has stepped up its own auditing of carmaker claims and has required Ford Motor Company, Mercedes-Benz and BMW to restate fuel-efficiency numbers for several of their models.

Edmunds says: The settlement shows that the government is serious about enforcing the accuracy of automakers' fuel economy estimates — and that's a plus for consumers.

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