Hyundai and Kia have agreed to pay a combined $200 million to more than 30 US cities and counties to settle claims that the automakers’ failure to install standard engine immobilizers in millions of vehicles fueled a nationwide theft epidemic that overwhelmed police departments and increased insurance costs for consumers.
The settlement, filed in federal court in Los Angeles, resolves lawsuits brought by municipalities including Milwaukee, Cleveland, St. Louis, Baltimore, and San Diego, which alleged that the defect created a foreseeable public safety burden they were forced to bear.
The Defect
Between model years 2011 and 2022, Hyundai and Kia sold approximately 8.3 million vehicles in the United States without engine immobilizers — a standard anti-theft device required in Canada and Europe that prevents starting a vehicle without the correct key fob signal. The omission made the vehicles easily stealable using just a USB cable and a screwdriver, a method widely shared on social media beginning in 2021.
Thefts of Hyundai and Kia vehicles in some cities increased by over 700% within months of the technique going viral. Milwaukee alone saw a 2,500% increase in Kia and Hyundai thefts between 2020 and 2022.
Municipal Claims
Cities argued they incurred massive unexpected costs: additional police patrols, court processing, impound facility management, and victim services. Milwaukee estimated $3.4 million in direct costs attributable to the theft epidemic in 2022 alone.
Consumer Settlements
Separately, Hyundai and Kia reached a $200 million consumer class action settlement in 2023, providing compensation to owners for stolen vehicles, increased insurance premiums, and costs of aftermarket security systems. That settlement’s claims period has closed, but owners who experienced theft after June 2023 may still have remedies through individual claims.