Dealers Allege Hyundai Fudged EV Sales Figures, Sparking Legal Battle and Investigations

Chicago, IL — Hyundai is currently under scrutiny after several of its dealers filed a lawsuit in federal court in Chicago, claiming the South Korean automaker manipulated electric vehicle (EV) sales figures. The legal action, initiated by Napleton Aurora Imports in Illinois and its affiliated franchises, alleges that Hyundai Motor America Corp (HMA) coaxed dealers into misusing inventory codes designated for “loaner” vehicles to inflate sales statistics.

According to the lawsuit, dealers who complied with the alleged manipulation received price discounts and other incentives from Hyundai. Conversely, those who refused to participate faced punitive measures. The dealers involved in the lawsuit contend that this deception not only misrepresented consumer demand but also limited customer choices by concentrating popular models in specific dealerships, thereby distorting market competition.

Hyundai has responded to the allegations by denying any wrongdoing and has launched its own internal investigation. Furthermore, the company is actively involved in litigation to sever ties with two Napleton-affiliated franchises in South Florida connected to unrelated criminal allegations.

This lawsuit raises serious questions about the integrity of reported EV sales, a key metric for investors and the public in understanding market dynamics and companies’ financial health. If proven, such practices could significantly impact Hyundai’s reputation and investor trust.

In another aspect of the auto industry, increased competition is expected to heat up the EV market for the latter half of 2024. Hyundai’s U.S. CEO, Randy Parker, remains optimistic yet cautious, acknowledging that while the company has performed well so far, the road ahead will be challenging. Industry-wide price cuts, consumer uncertainty about EV technology, and economic factors such as interest rates could all influence market dynamics in the coming months.

Adding to industry challenges, Fisker and Lucid, two notable players in the EV sector, have recently announced recalls. Fisker is recalling over 7,500 of its Ocean model due to a fault in the communication with the cabin’s electric water pump, which could potentially result in a loss of drive power. Meanwhile, Lucid is recalling approximately 5,250 of its Air sedans from 2022-2023 due to a software issue that could cause power loss. An additional recall covers a defect with the high voltage coolant heater, which may prevent the windshield from defrosting properly.

While recalls are common in the auto industry and typically not indicative of systemic issues, they do present an opportunity for companies to demonstrate responsibility and responsiveness to customer safety. Addressing these issues quickly and effectively is critical in maintaining consumer trust.

As the auto industry continues to navigate these multiple challenges, from legal disputes to competitive pressures and technical issues, the remainder of 2024 will likely be a pivotal period for many companies in defining their trajectories in the rapidly evolving automotive landscape. With stakes in both consumer confidence and operational integrity, how companies respond to these challenges could redefine industry standards and consumer expectations.