Hyundai is accused of falsely inflating EV sales in the US to appease its South Korean owners

• A new lawsuit accuses Hyundai of artificially inflating its EV sales numbers.
• The lawsuit said one manager told a dealer he had to "hit a number" to appease Hyundai's South Korean owners.
• Hyundai has reported strong EV sales in recent months, even as demand for electric cars has slowed.

Hyundai has been accused of artificially inflating its EV sales in a lawsuit filed by a group of dealers.

The lawsuit says that the automaker encouraged dealers to falsely record sales of unsold electric models and accused one sales manager of telling a dealership he was "up against the wall" and had to "hit a number" to appease Hyundai's South Korean owners.

Hyundai has reported surging EV sales in the US in recent months, with the South Korean automaker's Ioniq 5 and 6 electric models recording record sales in May.

The company and its sister automaker Kia have largely defied a general slowdown in demand for electric vehicles, thanks to their array of hybrids coupled with more affordable battery electric models.

The lawsuit, filed in a district court in Illinois, says sales were inflated by a secret program that advised dealers to falsely report unsold vehicles as "sold" to a customer or placed into loaner service, only to reverse the sale the following month.

It alleges that those dealers who did so were awarded extra allocations of Hyundai's fastest-selling vehicles and other rewards and benefits.

The lawsuit says that in a phone call — a record of which is included in the complaint — a Hyundai sales manager encouraged a dealership employee to participate in the scheme, offering extra inventory of faster-selling gasoline and hybrid models in return. Per the suit, the sales manager apologized for the "slimy" request but stated that "desperate times call for desperate measures."

"We're kinda up against the wall and we gotta hit a number for the press and for the Koreans," the transcript quotes the manager as saying. "So if you can help out in any way, I can help you by giving you those pipeline cars."

Hyundai did not respond to a request for comment.

The company said in a statement to Reuters that it had opened an investigation into the allegations and did not condone falsifying sales data.

Do you work at Hyundai or have a tip? Get in touch with this reporter via email at tcarter@businessinsider.com.