Hyundai, Kia Overstated Gas Mileage

An EPA inquiry that revealed that Hyundai and Kia had overstated the fuel efficiency of 900,000 automobiles could cost the companies hundreds of millions of dollars over the next few years.

The EPA routinely tests vehicles to make sure their performance matches company specifications. In the Hyundia and Kia matter announced today, the mileage numbers will be adjusted mostly by 1 to 2 mpg, with the largest adjustment being 6 mpg for the Kia Soul, according to the EPA. The adjustments affect 35% of 2011-1013 model year vehicles sold through October, according to the companies.The 2012 Hyundai/Kia fleet fuel economy will drop from 27 mpg to 26 mpg.

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

Hyundai and Kia are affiliated companies, announcing in a joint press release that "procedural errors" at their joint test operations in Korea led to the incorrect fuel economy ratings. 

"Given the importance of fuel efficiency to all of us, we're extremely sorry about these errors,” John Krafcik, president and CEO of Hyundai Motor America, is quoted as saying in the car companies' press release. "When we say to Hyundai owners, 'We’ve got your back,' that’s an assurance we don't take lightly." 

The companies will reimburse car owners for the extra gas guzzling via a debit card with an amount based on the fuel price in their area and the miles they have driven. They will also tack on 15% for the inconvenience.

As an example, a Californian Hyundai owner who drives 15,000 a year and gets 1 MPG less than expected would receive $100 this year.Owners nationwide will continue to receive annual payments for as long as they own their cars.

Doing the math using the California example, that could mean more than $90 million a year for the two companies if all 900,000 affected owners opt in. 

For additional information, visit www.kiampginfo.com and hyundaimpginfo.com.

Justin Loiseau has no positions in the stocks mentioned above. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.

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