Updated 12:27 IST, July 9th 2024
Hyundai Faked US Electric Car Sales, Faces Lawsuit
Hyundai Motor Company is in a legal battle that follows accusations of inflating sales figures for electric vehicles (EV) in the United States.

The South Korean automotive giant, Hyundai Motor Company, is in a legal battle that follows accusations of inflating sales figures for electric vehicles (EV) in the United States. A group of Hyundai Motor dealers that was led by Napleton Aurora Imports and affiliated franchises has filed a lawsuit in Chicago federal court and claims that Hyundai has shown false sales data and dealerships are penalised that refused to participate in the alleged scheme.
According to the lawsuit filed, Hyundai Motor America Corp (HMA) pressured dealers to manipulate inventory codes meant for "loaner" vehicles to exaggerate and increase electric vehicle (EV) sales. Discounts on wholesale and retail prices and other incentives were awarded to the dealers that complied with these practices.
In response to the allegations, Hyundai issued a statement where they stand against falsifying sales data and confirmed an internal investigation into the matter upon receiving initial alerts.
In a counterclaim strategy, Hyundai highlighted its legal actions in South Florida aimed at terminating franchises associated with the Napleton group, citing separate criminal allegations.
The lawsuit has accused Hyundai of fraudulent practices and has violated the Robinson-Patman Act, which is a federal antitrust law prohibiting price discrimination by sellers. It claims that by manipulating sales figures, Hyundai concentrated desirable vehicle inventory among compliant dealers, which limited consumer choice while improving its reported sales to investors and the public.
The complaint alleges that Hyundai's focus on sales volume growth for electric vehicles has misrepresented the demand in the actual market, and portrayed an artificial growth that was driven by internal sales manipulation rather than genuine consumer interest.
Legal documents referenced a phone call where a Hyundai district sales manager on purpose focused on the importance of hitting sales targets "For the press and the Koreans," suggesting internal pressure to meet publicised sales goals.
The dealers said they have been denied benefits from Hyundai. They have asked the court to award an unspecified amount of damages to cover lost sales, revenue, and profit
A similar lawsuit against Chrysler in 2019 was settled by Napleton, under confidential terms, that accused Chrysler of similar sales inflation tactics.
The case, titled Napleton Aurora Imports Inc et al v. Hyundai Motor America Corp, is currently pending in the US District Court for the Northern District of Illinois.
For Napleton, legal representation is provided by Russell McRory and Mir Ali of ArentFox Schiff. Hyundai has yet to make an appearance in the proceedings.
The automotive industry's integrity and sales reporting practices have faced high scrutiny following previous cases of inflated sales figures and have impacted investor perceptions and market trends.
(with Reuters input)
Published 12:12 IST, July 9th 2024