Hyundai Invests $50 Million In New Safety Facility After Scandalous Recall

Feb. 13, 2022 4:56 PM ET by Jarryd Neves Technology / 8 Comments

The Korean carmaker's investment is twice the amount the NHTSA demanded as part of a consent order.

Hyundai and Kia have been on quite a roll lately. The Ioniq 5 and EV6 continue to shake up the affordable EV segment, the all-new Sportage has commenced production in the United States and the Tucson has even landed itself a starring role in Hollywood's latest blockbuster.

But while other marques choose to preview cutting-edge creations at the 2022 Chicago Auto Show, Hyundai has chosen to announce something far bigger than a new model or trim line: a $50 million Safety Test and Investigation Laboratory (STIL) facility. The Korean carmaker says the establishment will be sited at its Michigan-based research and development center, increasing the existing safety testing and analysis. The facility will include a forensics lab, a 500-meter test track, a high voltage battery lab, and a field crash investigation lab, among other things.

Expected to be operational in 2023, Hyundai says the investment is "focused on enhancing Hyundai's safety commitment in identifying vehicle field issues, preventing crashes, and keeping passengers safe."

Late in 2020, the National Highway Traffic Safety Administration (NHTSA) announced consent orders with the US subsidiaries of Hyundai and Kia, in relation to recalls for vehicles fitted with Theta II engines. Following an investigation, the agency found that both carmakers had conducted untimely recalls of over 1.6 million vehicles and reported incorrect recall-related information.

Owners reported spontaneous combustion, with vehicles catching fire with no prior warning and without any collision beforehand. Affected vehicles included the 2011-2014 Hyundai Sonata, Santa Fe, and Kia Optima, as well as the 2010-2015 Soul. Overall, 3,000 vehicle fires and more than 1,000 injuries were reported.

Under the consent order, Hyundai was forced to spend $25 million on a test and inspection laboratory. The vehicle maker has increased the required investment to $50 million. "With the added testing and investigation capabilities of the STIL, we will better understand customer vehicle issues, identify and address defects and analyze vehicle systems more efficiently with our own, on-site laboratory," said Hyundai Motor North America's Brian Latouf.

2013-2016 Hyundai Santa Fe Sport Front View

2013-2016 Hyundai Santa Fe Sport Side View

2011-2013 Hyundai Sonata Sedan Right Side View

2011-2013 Hyundai Sonata Sedan Three Quarter Rear Left Side View

The $25 million test and inspection laboratory falls under a "Performance Obligation Amount" totaling $40 million. The NHTSA noted that the other $15 million is to be dedicated to "Safety Data Analytics infrastructure." This infrastructure will assist the company in obtaining very useful information which could, possibly, preempt and prevent catastrophic incidents and subsequent recalls, as experienced with the Theta II powertrain.

"Hyundai America Technical Center (HATCI) is excited to collaborate with Hyundai Motor North America (HMNA) on a state-of-the-art safety test laboratory at our Michigan R&D campus. Having on-site access to perform real-world evaluations further enhances our safety commitment to our customers and emphasizes our commitment to the region," said John Robb, president of HATCI.

While nowhere near as big as the aforementioned example, both Hyundai and Kia have been plagued with recalls in recent years. The all-electric Kona was embroiled in a battery recall just last year, with sister brand Kia having to contend with an airbag issue plaguing several older models.