Automotive history is littered with scandals that grabbed headlines, damaged consumer confidence, and caused reputational harm to the companies caught up in the sordid incidents.
While not all the scandals necessarily involve intentional acts of deception, some of them do. With that said, here are 16 of the biggest automotive scandals the automotive sector has ever seen.
Volkswagen Dieselgate (2015)
Volkswagen Dieselgate, the story of which broke in 2015, was a scandal of epic proportions. After being backed up in a corner, Volkswagen acknowledged it installed software on diesel vehicles to detect and defeat emissions tests.
North of 11 million vehicles globally were caught up in the carmaker’s deceptive tactics. Volkswagen was forced to spend as much as $14.7 billion to settle allegations it cheated emissions tests and lied to customers.
Hyundai/Kia Overstated MPG (2012)
When people research vehicles before making buying decisions, one of the things they look at is the miles per gallon. So, what happens when automakers fib on the numbers and report better miles per gallon than is the case?
Unfortunately, Hyundai and Kia overstated fuel economy numbers for north of 1 million vehicles in the U.S. According to MotorTrend, the automakers agreed to pay $41.2 million to 33 states which investigated them for exaggerated fuel economy ratings, as well as a settlement of $350 million to the EPA and Department of Justice later in 2013.
FCA Bypassing Emissions Test (2017)
Unfortunately, FCA didn’t learn from the Volkswagen Dieselgate debacle. It was accused in 2017, two years after Volkswagen’s deceit, of using comparable cheat devices in its diesel vehicles to get around emissions tests. While admitting the automaker might at some stage failed to properly disclose methods for emissions control tech in certain vehicle models, FCA said it didn’t purposefully cheat emissions tests in the U.S.
Ford Pinto Fires (1970s)
Just about everyone has heard about the infamous Ford Pinto subcompacts. In the 1970s, they gained renown for all the wrong reasons, including their penchant to burst into flames when rear-ended. The Pinto’s fuel tanks were manufactured improperly and could easily rupture even in relatively minor crashes.
According to one source, Ford knew the vehicles were unsafe but pursued production since paying lawsuits would be cheaper than redesigning the vehicle. 100+ lawsuits were filed against the automaker due to the Pinto’s design problems. And as many as 900 people died in fiery accidents involving the cars.
Toyota Sudden Acceleration (2009–2011)
Imagine driving your car and, without any input from you, feeling it lunge forward. Some Toyota owners can relate to such scary scenarios.
Toyota’s sudden acceleration problem in 2009 and 2011 involved three different recalls and millions of cars. In November 2009, there was a recall because the front driver’s floor mat could get caught under the acceleration pedal. In January 2010, there was a recall because the acceleration pedal would get stuck, and in February 2010, there was a recall due to hybrid anti-lock brake software. Toyota agreed to pay $1.2 billion to steer clear of prosecution for hiding significant safety problems concerning unintended acceleration.
Takata Airbag Scandal (2008–2019)
One of the biggest and most severe recalls in automotive history was the Takata Airbag Scandal from 2008 to 2019. The problem stemmed from Takata airbags breaking down because of the ammonium nitrate they contained. Because of this, these airbags could detonate violently and release metal shrapnel into the vehicle.
Meanwhile, 67 million airbags were recalled and, as of April 2024, 88% of these airbags were fixed or replaced. But that means there are still millions of vehicles on the road with at-risk airbags with over 400 injuries and 27 deaths in the U.S. alone (as of August 2024). Takata ultimately went bankrupt.
GM Ignition Switch Defect (2014)
GM in 2014 recalled 3.2 million vehicles because of an ignition switch problem. Because of the issue, the ignition switches could shut off the engine and cut off the power steering. Another source notes that faulty ignition switches are believed to be behind nearly 100 deaths since 2005. GM was assessed fines worth $35 million for delays in issuing a recall and, as of the first six months of 2014, paid at least $1.7 billion.
Ford Explorer/Firestone Tires (1990s)
The Ford Explorer/Firestone Tires in the 1990s is another unfortunate scandal. Car Throttle says the National Highway Transportation Safety Association (NHSTA) received many complaints between 1990 and 2000 about tire failures on Ford Explorers with certain Firestone tires.
Ford and Firestone were slow in informing the NHSTA about the high tire failure rates they were aware of. Because of the problem, 200+ people died in accidents resulting from the tread on the tires separating. One report says up to 200 lawsuits were filed against Ford and Firestone.
Jeep Grand Cherokee Fire Risk (2013)
The 2013 Jeep Grand Cherokee was recalled due to a potential risk of electrical fires. The problem was caused by wiring for the vehicle’s sunvisor vanity lamp. Unfortunately, the lamp was subject to short-circuiting after a repair.
DeLorean Financial Scandal (1982)
When it comes to the DeLorean financial scandal, the moral of the story is that some people will do anything to get out of debt. In the fall of 1982, John DeLorean, founder of DeLorean Motor, was hit with a cocaine trafficking charge. An FBI informant reached a deal where DeLorean would serve as financier to sell millions of dollars worth of cocaine.
At the time, his company was in debt to the tune of $17 million. On August 16, 1984, a jury delivered a not guilty verdict, arguing that what the government did to Delorean was a clear example of entrapment.
Daimler Bribery Scandal (2010)
Another scandal is the 2010 Daimler bribery scandal that involved accusations the German automaker used bribery to win contracts in several nations. Daimler AG and some of its subsidiaries agreed to pay combined civil and criminal fines of $185 million to settle a Foreign Corrupt Practices Act probe. The probe discovered the automaker had bribed government officials in no fewer than 22 countries to win business contracts between 1998 to 2008.
Toyota Fuel Pump Recall (2020)
While Toyota has a reputation for reliability, that doesn’t mean it’s perfect. One example is the fuel pump recall in 2020 which saw the automaker recall 5.84 million SUVs, minivans, trucks, and cars.
The company said the problem was related to a faulty fuel pump that could stall the vehicle and make it impossible for the owner to restart the vehicle. Another report says Toyota agreed to a potential $150 million settlement related to class-action legal action in the U.S. for the fuel pump issue.
Fiat’s Fake Sales Figures (2019)
Fiat agreed to pay a settlement charge of $40 million for misleading investors by reporting erroneous numbers of new vehicles sold monthly. Securities and Exchange Commission (SEC) said it had uncovered antifraud violations from Fiat’s erroneous reports about 75 straight months of year-over-year sales growth from 2012 to 2016. The SEC said the streak ended in September 2013. Fiat did not admit or deny wrongdoing.
Chevrolet Bolt EV Fire Recall (2021)
In 2021, GM recalled all Chevy Bolt EVs from the 2017 to 2022 model years due to battery fire risks. It said the high-voltage battery could catch fire if charged to or close to full capacity. The recall cost GM around $1.9 billion in 2021.
Chrysler’s “Lifetime Warranty” Loopholes (2007)
When something seems too good to be true, it probably is. That’s the feeling many Chrysler owners had with the company’s lifetime powertrain warranty. When scores of buyers brought their vehicles to Chrysler dealerships for free repairs under the warranty, they were denied the coverage under the lifetime warranty.
As it turned out, there was some fine print that many missed. For the lifetime powertrain warranty to remain in effect, the warranty holder had to get a free-of-charge powertrain inspection done by a Chrysler, Dodge, or Jeep dealer every five years. The problem was that many owners didn’t know about this requirement and were, therefore, denied warranty coverage.
Nissan CEO Carlos Ghosn Scandal (2018)
Carlos Ghosn, the former Nissan chairman and CEO, was arrested in Japan on suspicion of committing financial crimes in 2018. He had allegedly failed to report accurate earnings. The following year, while awaiting trial under house arrest, Ghosn fled Japan hiding in a large box shipped via private jet.
There’s More Where That Came From
These are some of the biggest scandals ever in the automotive space, but they’re far from the only ones. Whether intentionally or unintentionally, carmakers and suppliers sometimes make mistakes that rock the industry and shake consumer confidence.
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