About Hyundai’s Settlement with the EPA and CARB

Hyundai 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 our 2012 restatement of fuel economy ratings. 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 our 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.

Importantly, Hyundai’s process for testing the fuel economy of our vehicles was – and is – consistent with government regulations and guidance, which have always afforded broad latitude to vehicle manufacturers in determining test conditions, enabling for example testing anywhere in the temperature range of 41-95 degrees and tires to be broken in without specifying how or on what type of surface beyond “a smooth level road.” 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 testing, and currently is working to develop new guidance for the industry in order to improve precision, repeatability and accuracy.

The Backstory

On November 2, 2012, Hyundai announced the voluntary adjustment of fuel economy ratings for approximately one-quarter of our 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 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 theh option of being made fully whole for Hyundai’s ratings restatement.