Hyundai Resolves U.S. EPA Investigation of 2012 Fuel Economy Ratings Restatement
Automaker’s New Fuel Economy Testing Program Approved by EPA in October 2012
FOUNTAIN VALLEY, November, 3, 2014 – Hyundai today announced that it has entered into an agreement with the U.S. Environmental Protection Agency (EPA) and California Air Resources Board (CARB) to resolve the government’s investigation of its 2012 restatement of fuel economy ratings. The adjustment affected approximately one-quarter of Hyundai 2011-13 model year vehicles, reducing their combined city/highway fuel economy by 1-2 miles per gallon (mpg). As part of the agreement, Hyundai will pay a $56.8 million civil penalty, forgo the use of approximately 2.7 million greenhouse gas (GHG) emission credits – the credits representing the difference between original and restated emission data – and continue to implement a series of measures including the formation of an independent certification test group to oversee the automaker’s fuel economy testing, training, data management and reporting. Additionally, Hyundai will continue to audit model year 2015-16 vehicles to confirm the accuracy of their fuel economy ratings.
“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.”
According to the EPA Fuel Economy Trends Report, Hyundai’s adjusted fuel ratings are 27.2 mpg for 2011, 28.3 mpg for 2012 and 29.0 mpg in 2013 model year vehicles. Similarly, the Union of Concerned Scientists recently named Hyundai the “Greenest Automaker” for the 2013 model year based on emissions of nitrogen oxide, non-methane organic gas and CO2.
Importantly, Hyundai believes its process for testing the fuel economy of its vehicles is consistent with government regulations and guidance, which afford broad latitude to vehicle manufacturers in determining test conditions. Outside of a data processing error related to the coastdown testing method by which Hyundai calculated resistance or “road load,” it was Hyundai’s regulatory interpretation within this broad latitude that was responsible for the ratings restatement. Hyundai has corrected the error, and the EPA in October 2012 approved the automaker’s new fuel economy testing program.
Over the past 30 years, the EPA has acknowledged the variability of its coastdown testing1, and currently is working to develop new guidance for the industry in order to improve its precision, repeatability and accuracy.
“Hyundai is committed to partnering with the government to innovate fuel economy testing procedures in order to achieve more accurate and reliable ‘real-world’ results for consumers,” said Zuchowski.
There is no environmental impact resulting from Hyundai’s fuel economy ratings restatement, and the automaker will continue to hold a surplus of GHG credits – approximately 20 million – following implementation of today’s settlement. To compensate the national program to reduce GHG emissions and improve fuel economy, Hyundai will amend the GHG reports it submitted to the EPA before understanding that its interpretation of industry test procedures differed from the government’s reading of the same procedures.
About Hyundai’s Fuel Economy Restatement and Customer Reimbursement Program
On November 2, 2012, Hyundai announced the voluntary adjustment of fuel economy ratings for approximately one-quarter of its 2011-13 model year vehicles, reducing their combined city/highway fuel economy by 1-2 miles per gallon (mpg), and relabeled affected vehicles still in dealer showrooms. In order to compensate affected customers, Hyundai provided a lifetime reimbursement program to cover the additional fuel costs associated with the rating change plus a 15 percent premium in acknowledgement of the inconvenience. The majority of customers affected by the ratings restatement enrolled in the automaker’s reimbursement program and are being compensated based on their actual mileage and the fuel costs for the region in which they live. While customers responded favorably to the reimbursement program, Hyundai through a recent class action settlement offered the option of a single lump sum cash payment for those customers who would rather not return to a dealership to have their mileage verified. So, through either the one-time lump sum payment or original lifetime reimbursement program, customers have the option of being made fully whole for Hyundai’s ratings restatement.
1For example: EPA Report No.: EPA-AA-CD-84-01, Technical Report, “Road-Load Coastdown Testing of Selected 1981 thru 1984 Model Year Light-Duty Vehicles and Light-Duty Trucks,” April 1984; January 7, 2002 Dear Manufacturer Letter Re: Notice of EPA/Industry Road Force Workshop (CCD-02-01(LDV/LDT)