A host of proposed class action lawsuits (e.g., Krauth-Hyundai Complaint; Quiroz-Kia Complaint; Graewingholt-Hyundai Kia Complaint; Olson-Hyundai Kia Complaint) have been filed in the last several weeks against one or both of Kia and Hyundai accusing the Korean automakers of making false or misleading fuel efficiency claims in their advertising and marketing materials.
At the heart of these “garden variety” greenwashing cases (see, e.g., here and here for examples of the other kinds) are allegations that the automakers built advertising campaigns around representations that a number of their vehicles achieved gas mileage in the 40 mile per gallon range when the companies knew or should have known the actual mileage was signficantly lower. The mpg was also alleged to be misrepresented on many of the vehicles’ window stickers.
Some of the advertising statements cited in the cases include:
“With its 29 mpg city and 40 mpg highway standard fuel economy rating, Elantra is a perfect vehicle for consumers looking for an affordable solution to rising gas prices….”
“In the first quarter of 2012, 39 percent of all Hyundai vehicles sold achieved 40 mpg on the highway thanks in large part to Elantra’s continued success.”
The Hyundai Accent manages “a best-in-class standard 40 mpg fuel economy rating on the highway” and “achieves a category-leading 30 mpg city/40 mpg highway rating, making it one of four Hyundai nameplates to eclipse teh 40 mpg mark.”
Kia’s web site states that the Optima Hybrid, Rio, Soul, and Sportage have all received the EPA SmartWay Certification Mark – a designation given by the EPA “to the cleanest most fuel efficient vehicles.”
According to the complaints, an EPA investigation prompted by consumer inquiries found the gas mileage was overstated in seven Hyundai models and six Kia models, with as much as a 6 mpg discrepancy in some models. The complaints further state that Kia and Hyundai admitted they had misrepresented mile per gallon and fuel efficiency data.
One complaint notes the historic significance of the EPA audit:
The EPA’s Hyundai/Kia investigation is the first instance where the EPA has found a large number of vehicles from the same manufacturers deviated significantly from the manufacturer represented mileage figures.
The problem, according to another complaint, was flawed fuel economy testing. More particularly, Hyundai and Kia allegedly made procedural errors in their “coastdown” testing, implementing methods that were not compliant with EPA requirements and “insufficient in design, procedure, content, execution, and/or completeness.” As a result, the fuel economy ratings were “affected, inaccurate, and overstated.”
One of the complaints notes that Kia and Hyundai said they would implement a “refund” program, but calls the program “fraught with problems.” Instead, most of the actions seek injunctive relief relating to the companies’ advertising, restitution, and monetary damages.
“Defendants apparently placed profit before integrity in the marketing and sale” of their vehicles, one of the complaints summarizes. That plaintiff also quoted an Edmonds analyst’s seemingly apt prediction:
“In an industry where reputation is so important, this will undoubtedly give both carmakers ugly black eyes.”