Kia and Hyundai Slammed with Huge EPA Fine

2014 Hyundai Accent (Credit: Hyundai )

Thanks to penalties associated with the Clean Air Act, the EPA just settled with Kia and Hyundai for a cool $100 million. According to the government agency, the two South Korean automakers have sold over 1.2 million vehicles using inaccurate fuel economy figures, slamming them with the highest fine ever assessed for such a practice. A loud and clear message has been sent by the EPA, serving as a warning to other automakers who might have thought that such activities would slide through with a small fine.

According to the EPA, the Kia and Hyundai vehicles that were sold under the violating fuel economy standards created 5.2 million tons of greenhouse gases that weren’t accounted for because of the erroneous figures. It’s only fitting that part of the punishment means that the two automakers are forfeiting the carbon credits that go along with the unaccounted emissions. That component alone is valued at about $200 million, doubling the cash penalty both companies must pay out.

That’s not the end of what the EPA is requiring. To help prevent future problems, Hyundai must form an independent certification group that will verify the fuel economy figures for its vehicles. That move will cost the automaker another $50 million.

The two companies not only have to deal with the United States government for their actions, but also angry vehicle owners. In some cases, the fuel economy ratings that were placed on window stickers had to be adjusted by 6 mpg, triggering class action lawsuits, reports Bloomberg. As a 33 percent stakeholder in Kia, Hyundai has already pledged as much as $395 million to settle those lawsuits.

The EPA is clearly sending a loud and clear message to automakers and other companies that do business in the United States. As the agency’s administrator, Gina McCarthy said recently, businesses that are breaking the law will pay for their actions. The combined price Hyundai and Kia will be paying is somewhere in the neighborhood of $745 million.