GM to compensate SUV owners amid overstated mpg
General Motors Co. plans to compensate 130,000 retail customers who purchased or leased 2016 Chevrolet Traverse, Buick Enclave and GMC Acadia SUVs that have overstated fuel economy stickers, according to two sources familiar with the automaker’s plans who requested anonymity because the plans have not been made public.
The Detroit automaker is expected send letters to customers in the next week that detail the compensation program, said one source. The program is being launched as the company admits to making a mistake in overstating fuel economy by 1 to 2 miles per gallon — and because it wants to do the right thing for its customers, said one of the sources.
It’s unclear if the compensation would be cash, a gift card or come in some other form, but it is intended to cover the differences in actual fuel economy and what was on the sticker and miles driven. GM expects the total number of vehicles sold and impacted by the issue to be around 170,000 when rental car companies and fleet customers are included.
The automaker also is looking to address if and how it may compensate rental and fleet customers, according to one source. It’s likely GM’s compensation program would require all owners to agree not to sue GM if they accept the payout.
GM declined to comment on whether it will compensate vehicle owners but has said it is mailing affected customers corrected window stickers.
Last week, GM halted sales of its entire inventory of the SUVs — nearly 60,000 — because the vehicles had incorrect Environmental Protection Agency window stickers that overstated fuel economy. The stop-sale was issued until new, corrected window stickers could be printed and delivered to dealers, a process that is already well underway.
GM said the error meant fuel economy was listed 1 to 2 miles per gallon higher than it should have been. The vehicles have been on sale since the fall; through April this year GM has sold more than 82,000 of the large SUVs.
GM engineers discovered the error while working on labels for the new 2017 Acadia. GM spokesman Nick Richards said the company continues to work with the EPA on the issue.
“New emissions-related hardware in the 2016 Chevrolet Traverse, GMC Acadia and Buick Enclave, required new emissions testing. That data was not captured in calculations made for EPA fuel economy labels and caused 2016 model-year fuel economy numbers to be overstated by 1-2 miles per gallon for these vehicles,” the automaker said in a statement.
GM said the correct fuel economy information is as follows: 18 mpg combined city/highway for front-wheel drive SUVs, or 15 mpg in the city and 22 mpg highway; all-wheel drive models have a combined city/high rating of 17 mpg, and 15 mpg city and 22 mpg highway.
Plans of the compensation program come as the automaker faces at least one lawsuit over the issue. A class-action lawsuit filed by a Florida resident on behalf of the SUV owners Tuesday in U.S. District Court in Detroit alleges GM marketed and sold vehicles with false fuel-economy ratings, and that owners are entitled to compensation.
A GM spokesman declined to comment on the lawsuit.
It’s unclear if GM could face any fines from federal regulators over the error. The EPA, in a brief emailed statement Friday, confirmed GM notified the agency of the issue and that it has asked GM to provide the agency information. On Thursday, an EPA spokesman declined to comment on GM’s plans to compensate owners.
Other automakers such as Ford Motor Co., Hyundai Motor Co. and Kia Motors Corp. have compensated owners for overstating fuel economy ratings.
Ford in 2014 lowered fuel economy ratings on six vehicles and agreed to pay anywhere from $125 to $1,050 to more than 200,000 owners as compensation for the extra money owners will spend on gasoline because of lower-than-promised fuel economy.