Lawsuit Alleges Hyundai Pressured Dealers to Falsify Electric Vehicle Sales

A recent lawsuit accuses Hyundai of pressuring its dealers to artificially inflate electric vehicle sales figures. The lawsuit, filed in Chicago, alleges compliant dealers were rewarded while those who resisted faced penalties, placing them at a competitive disadvantage.

Lawsuit Alleges Hyundai Coerced Dealers to Falsify EV Sales Figures, Rewarded Compliance

A recent lawsuit claims that Hyundai pressured its dealers to "artificially inflate" electric vehicle sales figures. The lawsuit alleges that compliant dealers were rewarded, while those who resisted faced penalties.

Filed in federal court in Chicago by Napleton Aurora Imports in Illinois and its affiliated franchises, the lawsuit accuses Hyundai of issuing press releases that promoted these "fake" figures to show year-over-year growth in EV sales.

Dealers who refused to participate were allegedly disadvantaged, such as being forced to promote less popular vehicles or denied wholesale price discounts for consumers.

Hyundai “has emphasized sales-volume growth in its Hyundai branded EVs, leading the public to believe these increasing EV sales are occurring organically because of the desirability of Hyundai EVs and customer demand for these vehicles,” the lawsuit claims. “That is a false narrative. Instead of organic growth fueled by desirable vehicles and consumer demand, [Hyundai Motor America] created a multitiered scheme to cause its dealers to report false sales.”

As The Verge reported, the lawsuit comes amid Hyundai's declining sales in the United States during the most recent quarter, despite the company's assertion of increased EV sales. Hyundai reported selling 4,669 electric cars in the United States in June, a nearly 9 percent increase from the previous year. The company claims its EV sales have increased by 33% this year.

The alleged scheme involved instructing dealers to fraudulently report unsold vehicles as "sold" or placed into a loaner service, only to reverse the "sale" the following month, a practice known as a "secret program."The plaintiffs assert that Hyundai employs this illicit program across all its U.S. operations.

The lawsuit includes transcripts of phone calls in which Hyundai sales supervisors pressured a dealership employee to participate in the scheme. One sales manager reportedly said he felt "slimy" for proposing this but stated that Hyundai Motor America was asking dealers to "steal some inventory."

Hyundai Faces Legal Battle with Napleton Dealerships Amid EV Sales Fraud Allegations

According to Reuters (via Automotive News), Hyundai attempted to terminate two Napleton dealership franchises in Florida before the litigation. This decision followed a Napleton executive's five-year probation sentence for criminal sexual battery allegations.

Hyundai asked Napleton to suspend its lawsuit while conducting an internal investigation. The dealership declined after Hyundai refused to withdraw from its litigation.

“We do not condone any intentional falsification of sales reporting data and have launched an immediate investigation,” spokesperson Michael Stewart said in an email. “We intend to take any and all corrective and remedial actions required based on that investigation.”

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