Hino Motors, the truck unit of Toyota, has agreed to pay $1.6 billion to settle claims with U.S. authorities over excessive diesel emissions from vehicles it sold between 2010 and 2022. The settlement also includes a guilty plea for the company’s role in fraudulently selling 105,000 heavy-duty diesel engines in the U.S. that did not meet emissions standards.
The announcement came on Wednesday, marking the conclusion of Hino’s legal troubles in the U.S. The company had been charged with fraud in a U.S. District Court in Detroit. These charges stemmed from Hino selling engines that violated environmental regulations.
The settlement includes a criminal penalty of $521.76 million, $442.5 million in civil penalties to U.S. authorities, and $236.5 million to California. A 2022 report commissioned by Hino revealed that the company had falsified emissions data for some engines going back to 2003.
As part of the deal, Hino will plead guilty to participating in a multi-year criminal conspiracy and will serve a five-year probation term. During this time, the company will be banned from importing any diesel engines into the U.S. Additionally, Hino must implement a comprehensive ethics and compliance program, as outlined by the U.S. Justice Department and the Environmental Protection Agency (EPA).
Todd Kim, the Assistant Attorney General, stated that Hino’s actions led to significant air pollution and violated several U.S. laws regarding environmental protection, consumer rights, and imports.
The settlement also includes a $155 million mitigation program to reduce the environmental impact of the violations by replacing marine and locomotive engines. There is also a $144.2 million recall program to address engine issues in heavy-duty trucks from 2017-2019.
According to the EPA, Hino admitted that between 2010 and 2019, it submitted false applications for engine certifications, altered emissions test data, improperly conducted tests, and fabricated data without actual tests.
Hino President Satoshi Ogiso said the company has improved its internal culture and compliance practices. “This resolution is a significant milestone towards resolving legacy issues that we have worked hard to ensure are no longer part of Hino’s operations or culture,” Ogiso stated.
California’s Investigation and Hino’s Loss
California’s Air Resources Board began investigating Hino in 2019 after inconsistencies in the company’s emissions data were discovered during the certification review process. California Attorney General Rob Bonta said, “Hino knowingly took unlawful advantage of California’s incentives designed to accelerate the adoption of clean transportation technologies, which protect public health from pollution.”
Hino reported an extraordinary loss of 230 billion yen (about $1.54 billion) in its second-quarter financial results for October to cover the expected costs of resolving the litigation.
This case follows similar scandals in the automotive industry, including Volkswagen’s 2015 emissions cheating scandal. Volkswagen paid over $20 billion in fines, penalties, and settlements after admitting to using defeat devices and software in nearly 11 million vehicles worldwide to bypass emissions tests.
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