Hyundai accused of falsifying electric vehicle sales data: lawsuit filed

Good morning! It’s Tuesday, July 9, 2024, and this is Morning shiftYour daily digest of the most important automotive news from around the world, all in one place. Here are the important stories you need to know.

1st Run: Hyundai’s EV Sales Numbers May Be Fake

Group Hyundai dealers are suing South Korean car manufacturer in federal court in Chicago. They claim that Hyundai deliberately inflated number of electric vehicles sold and punished dealers who refused to participate in the fraud. If it’s true… damn. From Reuters Agency:

A lawsuit filed Friday by Napleton Aurora Imports in Illinois and related franchises alleges that Hyundai Motor America Corp (HMA) pressured dealers to improperly use inventory codes intended for “replacement” vehicles to inflate sales figures.

According to the lawsuit, dealers who agreed to incorrectly code the vehicles were rewarded by Hyundai with discounts on wholesale and retail prices and other incentives.

Hyundai said in a statement on Monday that it does not tolerate falsification of sales data and launched an investigation after receiving information about the allegations.

The company also said it has initiated legal proceedings in South Florida seeking the closure of two Napleton-affiliated franchises over sexual assault allegations.

The accused filed a complaint Hyundai fraud and violations of the Robinson-Patman Act. For those of you who don’t know (including me), it’s a federal antitrust law that prohibits sellers from discriminating based on price:

Dealers who “played ball,” according to the lawsuit, would receive additional inventory of faster-selling Hyundai models. The lawsuit said the program put the desired inventory in the hands of fewer dealers, depriving customers of choice while helping Hyundai advertise rosy sales figures to the public and investors.

The company said Hyundai had emphasized the growth in electric vehicle sales, leading the public to believe that demand was market-driven.

“Instead of organic growth driven by desirable vehicles and consumer demand, HMA created a multi-level scheme to force its dealers to report fraudulent sales,” the complaint says.

The lawsuit quotes a Hyundai sales manager as saying over the phone: “We have to achieve a result for the press and the Korean people.”

Hey! It’s us! We’re “the press.”

The dealers said they were denied benefits from Hyundai and asked the court to award an unspecified amount of damages to cover lost sales, revenue and profits.

This is not the first time Napleton Aurora Imports has taken on a car manufacturer. In 2019, they reached a confidential agreement with Chrysler for allegedly conspiring to inflate sales figures. The carmaker has since denied the accusations.

Time will tell if the allegations against Hyundai are true or not. If so, they will shake up a large part of the automotive world.

2nd gear: Strong competition means electric vehicles will face a difficult second half of the year: Hyundai CEO

Let’s put that aside Hyundai lawsuit for a moment and focus on them Electric Vehicle Sales Numbers at face value. Randy Parker, CEO of the Korean carmaker in the US says the electric vehicle market will heat up in the second half of the year and will be more competitive than ever. From Automotive news:

“We’re pretty optimistic about the second half of the year, but it’s going to be tough,” Randy Parker told Automotive News after the company released U.S. sales results on July 2.

Parker said Hyundai, which offers three electric vehicles, has found a “sweet spot” in terms of where it wants to be in electric vehicle sales and that the automaker plans to “keep its foot on the gas.”

Hyundai closed the first half of the year in the U.S. with a 1.2 percent increase from the same period last year, with sales of 399,523 vehicles. Hyundai’s electric vehicle sales accounted for 7.3 percent of total sales in the first half of the year, the company said.

Hyundai said its share of electric vehicle sales in the industry rose from 3.4% in January to 5.4% in the first half of the year.

Parker said that despite the narrative that consumers are not interested in electric vehicles, “the proof is always in the performance, and we’re doing quite well in that area.”

Still, while Electric vehicle sales are actually growingAnalysts predict that growth, which has lifted the market from 1 percent to 8 percent in just three years, will begin to slow by the end of 2024. Nevertheless, sales are expected to exceed 10 percent by the end of the year.

However, in the second half of the year the industry will have to face difficulties.

“We’ve seen a lot of price cuts from our major competitors,” Parker said. “Tesla, Ford and Nissan have all cut prices this year, and we’re still dealing with consumer concerns: affordability, range anxiety and charging infrastructure.”

He added that higher interest rates, which have a drastic impact on monthly payments, could be lowered closer to the presidential election in November, but there is no certainty.

Don’t let anyone tell you EV sales aren’t doing well. Sure, the growth rate may not be as high as it once was, but damn if they aren’t still going strong.

3rd Gear: Another Fisker Ocean Recall

This Fisker Ocean Electric Crossover We are facing another product recall. Functionally dead carmaker is recalling 7,545 Oceans in the U.S., according to a letter from the National Highway Traffic Safety Administration. From Reuters Agency:

“A communication error with the electric cabin water pump could cause the high-voltage battery management system (BMS) to enter a failsafe mode, resulting in a loss of motive power,” the US regulator said.

Fisker said in the notice that it would replace the pumps free of charge to correct the problem.

Fisherman has already been forced to withdraw Ocean damaged door handles. This is also investigated by NHTSA for “unintended vehicle movement.” This is a really high quality product.

4th Gear: Lucid Air Discontinued Due to Power Loss

Transparentwhich is doing well compared to Fisker, will phase out around 5250 in 2022-2023 Electric air sedans due to a software problem that could cause a loss of power, according to a letter from the National Highway Traffic Safety Administration. From CNBC:

The regulator added that the electric vehicle maker will also recall about 7,506 2022-2024 Air luxury sedans due to an issue with the coolant heater that may not defrost the windshield.

In June, Lucid released a software update that corrects the software bug, as well as a separate update to identify the high-voltage coolant heater fault and warn drivers of affected vehicles.

It’s not all bad news for Lucid, though. The company is headquartered in Newark, California. reported strong second-quarter deliveries that were above market expectations earlier this week. Sure, price cuts helped boost demand, but you’ve got to do what you’ve got to do.

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