American authorities and a subsidiary of Toyota, Hino Motors, have agreed to a USD 1.6 billion settlement over diesel emissions violations on more than 105,000 vehicles sold between 2010 and 2022. Hino and U.S. officials said Wednesday that the Japanese truck and engine manufacturer said it would plead guilty to fraud charges in U.S. District Court in Detroit.
That settlement, subject to judicial approval, includes a USD 521.76 million criminal fine, USD 442.5 million in civil penalties for the federal agencies, USD 236.5 million for the state, and more than USD 299 million for mitigation and recall programs.
In the years from 2010 to 2019, Hino acknowledged falsifying emissions test data in U.S. engine certification applications and not meeting emissions standards. Excess air pollution from the violations including egregious breaches of environmental and consumer protection laws, EPA said.
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The agreement requires Hino to cover a USD 155 million mitigation program, that would offset air pollution caused by the violations by switching out older marine and locomotive engines. The recall will also require an USD 144.2 million program to correct noncompliant engines on heavy-duty trucks from 2017 to 2019.
Hino will also serve a five year probation, but the company won't be allowed to import its diesel engines into the U.S. and Hino will also have to set up a compliance and ethics program.
“This resolution addresses systemic failures by Hino to meet the emissions standards,” Assistant Attorney General Todd Kim said. "A public loss of confidence and harmful pollution occurred as a result of these actions."
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CARB launched their investigation into Hino in 2019 after discrepancies were found in emissions data provided to them in certification applications. Hino exploited California's clean air incentives, according to CARB.
Hino President Satoshi Ogiso stated the company has taken significant steps to reform its culture and compliance measures, emphasising that such failures will no longer be part of its operations.
This case echoes past scandals, such as Volkswagen's 2015 diesel emissions violations, which resulted in more than USD 20 billion in penalties globally for installing "defeat devices" in 11 million vehicles.
Hino previously recorded an extraordinary loss of 230 billion yen (USD 1.54 billion) in its October earnings to address the expected settlement costs.