Investigation Reveals Hyundai And Kia Overstated Fuel Economy

Published: Friday, November 02, 2012

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An investigation conducted by the U.S. Environmental Protection Agency revealed that Korean automakers Hyundai and Kia had overstated the fuel efficiency of several of their cars by as much as 6 miles per gallon.

The two companies will be forced to lower their mileage estimates for many models in their vehicle lineups and face millions in federal fines – not to mention irate motorists.

"I sincerely apologize to all affected Hyundai and Kia customers, and I regret these errors occurred," said W.C. Yang, chief technology officer of Hyundai and Kia's joint research and development center.

Both companies have heavily touted their fuel efficiency compared to competitors in their marketing, most notably Hyundai's well-advertised 40 miles-per-gallon claim on its Elantra sedan. The EPA audit found the Elantra received 38 MPGs on the highway.

The most-affected vehicle, though, was the Kia Soul. On its window sticker, executives touted the car's 35 MPGs in highway conditions. But it only actually received 29 MPGs during the EPA's audit, conducted in Ann Arbor, Mich. Sales of the popular Soul had climbed 18.1 percent so far this year, reaching 101,344 units through October.

Executives of Kia and Hyundai said 35 percent of the cars they've sold since 2010 are affected by the investigation, which amounts to approximately 900,000 vehicles. They plan to reimburse affected car owners with debit cards.

Fuel economy has become the No. 1 consideration for prospective car buyers, according to a Consumer Reports survey released earlier this year, as gas prices have risen and become more volatile over the past eight years.

"Consumers rely on the window sticker to help make informed choices about the cars they buy," said Gina McCarthy, assistant administrator for the EPA's Office of Air and Radiation. "EPA's investigation will help protect consumers and ensure a level playing field among automakers."

Although the agency did not specify how many, EPA officials said they received "a number" of complaints about the fuel-economy discrepancy between what customers saw on the window stickers and received in real-world conditions. Those complaints sparked an investigation.

Earlier this year, a consumer-advocacy group charged that Hyundai had misled consumers about the fuel efficiency of the Elantra in its advertising and publicly complained to the EPA. It was pleased with Friday's announcement, but questioned whether enough is being done to monitor the auto industry.

"I'm shocked that Hyundai would say this is procedural," said Jamie Court, president of Consumer Watchdog. "This is a significant development. This has to open the question of whether the EPA should be doing the testing or the automakers."

The EPA typically tests about 15 percent of possible vehicles each year, and relies on automakers to supply their own data for the rest of their fleets.

Consumer Watchdog has filed a lawsuit in Sacramento (Calif.) Superior Court against Hyundai, alleging deceptive advertising practices involving its 40-mpg claims surrounding the Elantra. Court said he felt Friday's developments bolstered the organization's case.

Kia and Hyundai conduct joint-testing operations in Korea, and in a statement said the overstatement was not intentional, but that it resulted from errors in measuring "coastdown," testing that simulates aerodynamic drag, tire rolling resistance and drivetrain friction loss.

"Given the importance of fuel efficiency to all of us, we're extremely sorry about these errors," said John Krafcik, president and CEO of Hyundai Motor America, in a written statement.

Cars that are currently on dealership lots will be re-labeled with revised window stickers, the EPA said.

Overall, the companies said the sticker changes reduced the fuel economies of their respective fleets by about 3 percent, falling from 27 MPGs combined to 26 MPGs combined.

While the Soul featured the most egregious overstatements, several other models were affected. Several trims of the Hyundai Santa Fe and Kia Rio had overstated by 4 miles per gallon, and the Hyundai Accent was over-touted by 3 miles per gallon.

From Hyundai, other affected models included the Veloster, Sonata hybrid, Tucson, Genesis and Azera. Other affected Kia models are the Sorento, Sportage and Optima. For more details on the automakers' plans to reimburse customers, visit HyundaiMPGinfo.com and KiaMPGinfo.com.

For a complete look at the specific discrepancies for all the vehicles, the EPA has assembled a chart at epa.gov/fueleconomy/labelchange.htm.


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