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Hyundai And Kia Penalized $350 Million For Overstated MPG Claims

Nearly two years after Hyundai and Kia announced they exaggerated fuel economy numbers for several of their most popular models, the two Korean automakers have paid a heavy penalty for the transgressions. The Department of Justice and Environmental Protection Agency announced a settlement Monday that will cost the two car companies approximately $350 million. The financial sum includes a $100 million fine, the largest ever levied under the Clean Air Act, and about $200 million in forfeited greenhouse-gas emissions credits. At a time when car buyers rank fuel economy as a top concern when they head to dealerships and the federal government has mandated increased efficiency, Attorney General Eric Holder said the settlement should serve as a warning to automakers not to fudge their numbers. "This will send a strong message that cheating is not profitable," he said. The settlement ends a federal lawsuit filed against the automakers in U.S. District Court, but it's important to note that it doesn't end a class-action lawsuit filed on behalf of consumers. A preliminary settlement in that case, based in Los Angeles, was approved last month, but final approval isn't expected until July 2015. Officials with the EPA said the $100 million figure roughly equals the economic benefits the two companies received from exaggerating the mileage claims on the window stickers of new cars. Fuel-efficient boasts helped Hyundai and Kia establish a strong foothold in the U.S. marketplace. Advertisements for the Hyundai Elantra stated the vehicle achieved 40 miles per gallon in highway driving, and helped the car win the prestigious North American Car Of The Year honors at the Detroit Auto Show for its 2012 model. In July 2011, the advocacy group Consumer Watchdog began receiving complaints from consumers that the Elantra and other Hyundai models fell short of their stated mileage claims in real-world driving. The group wrote to the EPA and Hyundai, asking both to investigate. Government officials said Kia had overstated the mileage on its popular Kia Soul crossover by 6 miles per gallon, and more than a dozen overall models were affected. On Monday, EPA administrator Gina McCarthy said the violations were "egregious." Based on the exaggerations, the EPA calculated that Hyundai and Kia had underreported the greenhouse gas emissions of their fleets by about 4.75 metric tons over the estimated lifetime of the vehicles. That figure aided in the $200 million credit forfeiture.

Hyundai looking to add plant in Mexico

Mexico is rapidly becoming the go-to place for North American auto production, and companies including Toyota, General Motors, and Audi are all building new plants, expanding or shifting some production there. Now, Hyundai is investigating joining them in the future. "I'm sure that over the years we'll see production of Hyundai products in Mexico," Pedro Albarran, managing director for the automaker in Mexico, said to Bloomberg. Albarran indicates that a likely location for such a factory might be the state of Nuevo Leon, where Kia also has a forthcoming $1 billion plant. The site would be an ideal location near suppliers. It's probably going to be a while before any of Hyundai's models start coming out of Mexico. According to Bloomberg, the automaker wants to wait to make a final decision until sales there reach around 50,000 annual units, and that benchmark isn't expected until 2018. While Kia's plant is slated to have a capacity around 300,000 vehicles a year when it opens in 2016, Albarran thinks Hyundai might start smaller at just over 100,000 annual examples. Some of those would likely include subcompact models for the Mexican market. The Korean automaker was rumored to be looking into a factory south of the border as far back as 2013.

2015 Kia Soul EV production model glimpsed before Chicago

A few days before its on-stage reveal at the Chicago Auto Show, the production version of the 2015 Kia Soul EV has been spotted, tagged and bagged in this series of spy shots. On the EV captured by our photographer's lens, we can see unusual baby blue accents on top, on the mirrors and up front, as well as a closed-off "Tiger Nose" that is both taller and larger than the grille on the standard Soul. The special "Eco Electric" badge on the sides is useful for identifying the car in the picture, but we can't imagine it'll make the transition to showroom floor (at least, we hope). The Soul EV's rear side is different, too, with the bottom lights moved lower and the design of the main taillights tweaked a bit (compare our spy shots gallery to the standard model here). The wheels get a fresh five-spoke design as well. What lies under the new exterior? Some things we already know. The Soul is supposed to have a "class-leading" range of over 120 miles on a charge thanks to a 27-kilowatt-hour lithium-ion polymer battery pack. The electric motor offers 109 horsepower and 210 pound-feet of torque to create a 0-62 mile per hour time of under 12 seconds and a top speed of around 90 mph. What we can't see in these shots is a window sticker, but from what we've heard before, the Soul EV, "won't be priced to stimulate demand." Early predictions put the price at $35,000-$40,000 US – before government incentives – when the car launches in the US in the second half of this year. The gas-powered Soul starts at $14,400. We should learn more in Chicago later this week.