Divyank Kushagra Bansal 
Hyundai and Kia find themselves in the middle of a billion-dollar lawsuit in the United States related to vehicle theft. According to a Reuters report, the carmakers have been sued by “several hundred” insurance companies that intend to recover over a billion dollars in losses they incurred due to a social media-propagated theft spree. A U.S. judge recently rejected the defendants’ bid to dismiss the case. This comes as a major blow to the two carmakers, who, earlier this year, agreed to a $200 million settlement on a class-action lawsuit filed by the vehicle owners on the same matter.
U.S. District Judge James Selna in Santa Ana, California, rejected arguments made by the carmakers that it was unfair for the insurance companies to recover alleged losses as they had collected insurance premiums from the affected customers and assumed theft risks at the time of insuring the vehicles.
In the official court document, the insurance companies allege that “Defendants knowingly manufactured and sold more than fourteen million Hyundai and Kia vehicles that do not contain an engine immobiliser or any equivalent operational anti-theft equipment as required to comply with the Federal Motor Vehicle Safety Standards (FMVSS) promulgated by the National Highway Traffic Safety Administration (NHTSA).” This claim holds Kia and Hyundai in violation of Federal Motor Vehicle Safety Standard 114 which states that a car must have a starting system that prevents the start-up of its engine or motor if the key is removed from the ignition slot.
As a result, Selna went ahead in favour of the plaintiffs (insurance companies) and quashed the lawsuit dismissal plea, stating that the lack of anti-theft devices on 14.3 million Hyundai and Kia cars made between 2011 and 2022 made thefts a “predictable consequence” of the carmakers’ actions. “Though the insurers have received premiums, defendants allegedly failed to include any anti-theft device as required under federal regulations,” Selna wrote. “Thus, the level of fault is almost entirely on the defendants.”
Kia and Hyundai claimed that the plaintiffs’ legal claims have no merit, as their vehicles comply with all federal safety and theft-protection standards. However, their claims were weakened by another shocking allegation made by the plaintiffs. The insurance companies also claimed that the carmakers provided the legally required standard safety and anti-theft equipment only on the more expensive models and provided it as a paid optional extra for the less expensive variants. The carmakers are also being blamed for concealing the latter information from customers.
The Problem
Hyundai and Kia’s vehicle theft debacle began taking shape in 2020, when a group of teenagers in Milwaukee, Wisconsin, dubbed the “Kia Boyz,” discovered the alleged “Thief Friendly Design” and began to post videos showing how to steal the vehicles in a matter of seconds on social media platforms like TikTok. It is claimed that the process only required the use of a USB cable. As a result, according to a report, Kia and Hyundai vehicle thefts shot up by a staggering 2,644% in 2021 in Milwaukee alone.
