The Obama administration on Monday hit Korean carmakers Hyundai and Kia with $300 million in fines and penalties for inflating gas mileage claims on a half-dozen vehicles, a move analysts say is proof the federal government intends to vigorously enforce new rules on fuel efficiency and greenhouse gas emissions.
The settlement, announced by the Environmental Protection Agency and Justice Department, is the largest ever under the Clean Air Act. It comes five years after the administration first issued strict new thresholds on vehicle fuel economy, part of a larger effort to cut down on emissions.
“Businesses that play by the rules shouldn’t have to compete with those breaking the law. This settlement upholds the integrity of the nation’s fuel economy and greenhouse gas programs and supports all Americans who want to save fuel costs and reduce their environmental impact,” EPA Administrator Gina McCarthy said.
The settlement comes after an investigation into emissions figures for about 1.2 million vehicles. The two companies overstated fuel economy by anywhere from one to six miles per gallon
Hyundai and Kia will pay a combined $100 million in fines and also will forfeit 4.75 million “greenhouse gas credits,” worth more than $200 million.
The credits allow companies to offset emissions from less fuel-efficient vehicles. They also can be traded to other automakers in a cap-and-trade-style system.
SEE ALSO: Happier consumers remain disgruntled voters
Moving forward, the EPA will require both automakers to audit gas mileage estimates on their vehicle fleets.
Specialists say Monday’s action should serve as a warning to the auto industry that failing to abide by the administration’s standards, or misleading consumers, will be met with stiff consequences.
“The EPA is sending a clear message to Hyundai, Kia and every other automaker — get your fuel-efficiency certification house in order,” said Karl Brauer, a senior analyst at Kelley Blue Book, a California-based auto research company best known for setting values on used vehicles. “The large fine, along with procedural requirements that include an audit of Hyundai and Kia testing, reflects frustration in the gray area between automakers’ stated mpg numbers and the real-world results experienced by car owners.”
The vehicles are from model years 2012 and 2013 and include the Hyundai Accent, Elantra, Veloster and Santa Fe, as well as the Kia Rio and Soul, according to the administration.
The violations first were uncovered in 2012.
Both automakers pledged full cooperation with the EPA going forward.
“Hyundai has acted transparently, reimbursed affected customers and fully cooperated with the EPA throughout the course of its investigation,” said David Zuchowski, president and CEO of Hyundai Motor America. “We are pleased to put this behind us, and gratified that even with our adjusted fuel economy ratings, Hyundai continues to lead the automotive industry in fuel efficiency and environmental performance.”
“Kia Motors is a responsible company, and the agreement with the U.S. Environmental Protection Agency is the result of good-faith efforts among the parties to resolve our issues. We are pleased to have this matter behind us,” Kia said in a statement.
• Ben Wolfgang can be reached at bwolfgang@washingtontimes.com.
Please read our comment policy before commenting.