David Shepardson
(Reuters) – Toyota Motor unit Hino Motors has agreed a $1.6 billion settlement with U.S. agencies and will plead guilty to excessive diesel emissions in more than 105,000 U.S. vehicles, the company and the U.S. government said on Wednesday.
The Japanese truck and engine maker has been charged with fraud in U.S. District Court in Detroit for illegally selling 105,000 heavy-duty diesel engines in the United States from 2010 to 2022 that did not meet emissions standards.
The settlement, which must still be approved by a US judge, includes a $521.76 million criminal penalty, $442.5 million in civil penalties to US authorities and $236.5 million to California.
A panel commissioned by the company said in a 2022 report that Hino had been falsifying emissions data for some engines since at least 2003.
Hino has agreed to plead guilty to participating in a multi-year criminal conspiracy and serve five years of probation, during which it will be barred from importing diesel engines it made into the U.S., and implement a comprehensive compliance and ethics program, the Justice Department and Environmental Protection Agency said.
Assistant Attorney General Todd Kim said Hino “falsified data for years to circumvent regulations,” adding that “the company’s actions have resulted in massive amounts of excessive air pollution and have been an outrageous violation of our nation’s environmental, consumer protection and import laws.”
The settlement includes a $155 million mitigation program to offset excess air emissions caused by the violations by replacing marine and locomotive engines, and a $144.2 million recall program to repair heavy-duty truck engines in 2017-2019.
The EPA said Hino admitted that between 2010 and 2019 it submitted false applications for engine certification approvals and altered emissions test data, improperly conducted tests and falsified data without conducting basic tests.
Hina president Satoshi Ogiso said the company has improved its internal culture, oversight and compliance practices.
“This resolution is a significant milestone toward resolving legacy issues that we have worked hard to ensure are no longer part of Hino’s operations or culture,” he said in a statement.
The California Air Resources Board began an investigation in 2019 when Hino’s certification applications were reviewed and emissions data inconsistencies were found.
“Hino knowingly unlawfully took advantage of California incentives designed to accelerate the adoption of clean transportation technologies, which protect the health and safety of Californians from pollution,” said California Attorney General Rob Bonta.
Hino said it booked an extraordinary loss of 230 billion yen, or about $1.54 billion, in its second-quarter results in October to cover expected costs of settling the litigation.
Over the past decade, several automakers have admitted to selling vehicles with excessive diesel emissions, including Volkswagen ( ETR: ) which paid more than $20 billion in fines, penalties and settlements after admitting in 2015 that it cheated emissions tests by installing “defective devices” and sophisticated software in almost 11 million vehicles worldwide.
