The US city stated the automakers failed to install anti-theft devices called immobilisers on most of their cars for over ten years - between 2011 and 2022 - making their vehicles more likely to be stolen.
New York has joined several other major cities that have sued Hyundai and Kia over the thefts, including Baltimore, Cleveland, Milwaukee, San Diego and Seattle.
The lawsuits have been prompted by the rise in popularity of a TikTok challenge in 2021 that prompted teens to steal vehicles off the street by hot wiring them using a USB cable. The prompt resulted in an 800 per cent rise in year-on-year car thefts in the city of Chicago, and an 85 per cent increase in these crimes in Los Angeles, according to CNBC.
In New York, officials referred to a "virtual explosion of thefts" of cars, saying reported stolen Hyundais and Kias doubled last year, and reached 977 reported thefts in the first four months of 2023, up from 148 in the same period in 2022 - about a 660 per cent increase.
In contrast, thefts of BMW, Ford, Honda, Mercedes, Nissan and Toyota vehicles have fallen over the same time period. As a result, the city accused Hyundai and Kia of "negligence" and "opening the floodgates" to these crimes.
"In electing profits over safety and deviating from industry norms by not including engine immobilizers as a standard safety feature, defendants created and maintained a public nuisance," the US District Court in the Southern District of New York wrote in a filing. "This case is a clear example of what happens to public safety when car manufacturers choose not to include standard anti-theft technology in their cars.
"Making sure cars are not easy to steal protects both property and the public by keeping dangerous drivers in stolen vehicles off the roads."
In response, Hyundai said it made immobilisers standard on all vehicles from November 2021 and had taken measures to reduce the threat of thefts. It added the firm is currently communicating with the US National Highway Traffic Safety Administration to assist its customers.
Kia called the city's lawsuit "without merit". It also stressed the company is working with law enforcement to combat "car theft and the role social media has played in encouraging it," and that it is "committed to supporting our customers and to vehicle security."
In February, Hyundai and Kia said they would offer software upgrades for as many as 8.3 million US vehicles that lack immobilisers. Last month, the two companies signed a $200m (£165m) settlement of a consumer class action over the thefts.
At the time, Baltimore Mayor Brandon M Scott said: "These cost-cutting measures employed by Hyundai and Kia at the expense of public safety are unacceptable."
New York City in its filing said that the thefts are continuing and that it is seeking unspecified "compensation for the economic losses."
Following the news reports, shares of Hyundai Motors slid by more than 2 per cent, while Kia Corp's dropped by more than 5 per cent.
To ID, or not to ID? How to solve the UK's digital identity dilemma
If the government is going to encourage public uptake of digital ID, it will have to provide people with better and more secure experiences of the technology.