Hyundai and Kia have agreed to pay $100 million (£62 million) in fines and forfeit $200 million in carbon credits after being found guilty of misleading customers about the fuel economy of more than one million cars sold in the United States. The penalty, announced on Monday by the Environmental Protection Agency (EPA) and the Justice Department, is the largest in the 50-year history of the Clean Air Act.
The inflated fuel economy claims involved approximately 1.2 million vehicles, representing about a quarter of the 2011-2013 models sold in the US. The EPA found that the car-makers had chosen the most favourable results, rather than the average, when processing test data, inflating fuel economy by one to six miles per gallon. This led to an understatement of greenhouse gas emissions by about 4.75 million metric tons over the estimated lifetime of the vehicles.
Hyundai had gained a marketing edge after fuel prices spiked in 2008 by claiming that its cars achieved 40 miles per gallon in highway driving. The company later lowered the claims and offered compensation to car owners for the extra fuel costs, attributing the errors to mistakes by engineers running the tests.
Under the agreement, the companies will also give up 4.75 million carbon credits, which the EPA said were worth more than $200 million. These credits had allowed Kia and Hyundai to continue selling larger, less fuel-efficient models popular with American consumers. Additionally, the companies accepted an audit of their 2015 and 2016 models and agreed to overhaul test protocols before the 2017 models come to market.
David Zuchowski, Hyundai’s chief executive in the US, said in a statement: “Hyundai has acted transparently, reimbursed affected customers and fully cooperated with the EPA throughout the course of its investigation. We are happy to put this behind us.” The EPA administrator, Gina McCarthy, emphasised that the settlement upholds the integrity of the nation’s fuel economy and greenhouse gas programs.
