Toyota unit Hino Motors reaches $1.6 billion US diesel emissions settlement

Nissan Motor (7203.T) launches a new tab unit The U.S. government and Hino Motors (7205.T), which opens a new tab, announced on Wednesday that the business has reached a $1.6 billion settlement with U.S. agencies and would enter a guilty plea for excessive diesel engine emissions in over 105,000 U.S. vehicles. A U.S. District Court in Detroit filed a fraud allegation against the Japanese truck and engine manufacturer for illegally selling 105,000 heavy-duty diesel engines that did not meet pollution regulations in the United States between 2010 and 2022. The deal, which is still pending approval by a U.S. judge, includes $236.5 million for California, $442.5 million in civil fines to U.S. authorities, and a $521.76 million criminal penalty.

In a 2022 report, a panel appointed by the company said that Hino had fabricated emissions data on a number of engines dating back at least to 2003. According to the Justice Department and Environmental Protection Agency, Hino consented to enter a guilty plea to participating in a multi-year criminal conspiracy, serve a five-year probationary period during which it will not be permitted to import any diesel engines it has produced into the United States, and implement a thorough compliance and ethics program. Todd Kim, the assistant attorney general, claimed that Hino “falsified data for years to skirt regulations” and that the company’s “actions led to vast amounts of excess air pollution and were an egregious violation of our nation’s environmental, consumer protection, and import laws.”

The settlement consists of a $155 million mitigation scheme to replace locomotive and marine engines and offset excess air emissions from the violations, as well as a $144.2 million recall effort to repair heavy-duty truck engines manufactured between 2017 and 2019. According to the EPA, Hino acknowledged that from 2010 to 2019, it submitted fraudulent applications for engine certification certifications, falsified data from emission testing, and conducted tests incorrectly and without doing any underlying tests. The company has enhanced its corporate culture, oversight, and compliance procedures, according to Hino President Satoshi Ogiso. “This resolution is a significant milestone toward resolving legacy issues that we have worked hard to ensure are no longer a part of Hino’s operations or culture,” he stated in a statement.

After reviewing Hino’s certification applications and seeing discrepancies in the emissions data, the California Air Resources Board launched an investigation in 2019. California Attorney General Rob Bonta stated, “Hino intentionally exploited California’s incentives intended to promote the adoption of clean transportation technologies, which protect Californians’ health and safety from pollution.” Hino stated that in order to cover the anticipated expenses of settling the lawsuit, it recorded an unusual loss of 230 billion yen, or around $1.54 billion, in its second quarter results in October. Volkswagen (VOWG_p.DE), which opened a new tab, paid more than $20 billion in fines, penalties, and settlements after admitting in 2015 that it had installed “defeat devices” and sophisticated software in nearly 11 million vehicles worldwide in order to cheat emissions tests. Over the past ten years, a number of automakers have acknowledged selling vehicles with excess diesel emissions.