Hyundai, Kia settle with feds for falsifying fuel-efficiency data

Hyundai Motor Co. and Kia Motors Corp. gave inaccurate fuel-efficiency measurements for about 1.2 million cars sold since 2012 across several of their brands, the Environmental Protection Agency and Justice Department said.

Aside from shelling out the $100 million in penalties, the auto companies will forfeit 4.75 million credits under a greenhouse gas emissions trading program that are worth about $200 million. It also will undergo more rigorous auditing and training to shore up a “systematically flawed” testing and reporting culture, EPA Administrator Gina McCarthy said.

“That tilts the market in favor of those that don’t play by the rules and it disadvantages those that do play by the rules,” McCarthy said of the carmakers’ transgressions. “That’s just not fair, and it’s also not legal.”

The vehicles’ emissions, however, do not actually violate the Clean Air Act, Attorney General Eric Holder said. But the companies ran afoul of the law by improperly reporting emissions, overestimating fuel-efficiency claims between one and six miles per gallon.

Those figures are key for calculating the greenhouse gas emission credits Hyundai and Kia claimed for the vehicles. It means that 4.75 million metric tons of emissions had gone unaccounted for, and the companies could have sold the credits to other companies to produce less fuel-efficient models or kept the credits to do the same.

“Because they used inaccurately low numbers to demonstrate compliance with emissions standards — cherry-picking data and conducting tests in ways that did not reflect good engineering judgment — Hyundai and Kia calculated higher fuel economy and lower greenhouse gas emissions than these vehicles actually have,” Holder said.

“They claimed more [greenhouse gas] emission credits than they were entitled to. And they touted these inaccurate fuel economy statistics to consumers.”