Hyundai, Kia reach $100M settlement with Justice Dept., EPA

Martin Divisek | Bloomberg | Getty Images

Automakers Hyundai and Kia have reached a settlement with the federal government over alleged Clean Air Act violations, agreeing to pay the largest ever penalty in the law's history.

According to the Environmental Protection Agency and the Justice Department, which jointly reached the settlement, the car companies sold about 1.2 million cars that emit around 4.75 million metric tons of greenhouse gases above what the companies said they would release.

Hyundai and Kia have agreed to pay a $100 million civil fine, and they will forfeit so-called carbon credits which are used to make up for vehicles that emit more greenhouse gases. Hyundai will pay $56.8 million of that penalty, while Kia provides the remainder.

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The 4.75 million forfeited greenhouse gas emissions are estimated to be worth over $200 million, according to the EPA.

"This unprecedented resolution with Hyundai and Kia underscores the Justice Department's firm commitment to safeguarding American consumers, ensuring fairness in every marketplace, protecting the environment, and relentlessly pursuing companies that make misrepresentations and violate the law," Attorney General Eric Holder said in a press release. "This type of conduct quite simply will not be tolerated."

In addition to misrepresenting vehicles' emissions, the automakers also overstated gas mileage, the government said.

The EPA discovered the violations in 2012, it said, and later investigations found that the companies' testing protocols "included numerous elements that led to inaccurately higher fuel economy ratings." The agency alleged that Hyundai and Kia "chose favorable results rather than average results from a large number of tests."