Hino Motors settles $1.6bn over U.S. diesel emissions

January 16, 2025 (MLN): Toyota Motor unit Hino Motors has agreed to a $1.6 billion settlement with U.S. agencies.

The company will plead guilty over excess diesel engine emissions in more than 105,000 U.S. vehicles, according to the company and the U.S. government on Wednesday.

The Japanese truck and engine manufacturer was charged with fraud in the U.S. District Court in Detroit.

The charges stemmed from unlawfully selling 105,000 heavy-duty diesel engines in the United States from 2010 through 2022 that did not meet emissions standards, as Reuters reported.

The settlement, which still must be approved by a U.S. judge, includes a criminal penalty of $521.76 million, $442.5mn in civil penalties to U.S. authorities, and $236.5mn to California.

A company-commissioned panel said in a report in 2022 Hino had falsified emissions data on some engines going back to at least 2003.

Hino agreed to plead guilty to engaging in a multi-year criminal conspiracy and will serve a five-year term of probation.

During this time, it will be barred from importing any diesel engines it has manufactured into the U.S. and must implement a comprehensive compliance and ethics program, according to the Justice Department and Environmental Protection Agency.

Assistant Attorney General Todd Kim said Hino "falsified data for years to skirt regulations," adding that the company's "actions led to vast amounts of excess air pollution."

He further stated that these actions were an egregious violation of the nation's environmental, consumer protection, and import laws.

The settlement includes a mitigation program, valued at $155mn, to offset excess air emissions from the violations by replacing marine and locomotive engines.

It also includes a recall program, valued at $144.2mn, to fix engines in 2017-2019 heavy-duty trucks.

The EPA said Hino admitted that between 2010 and 2019, it submitted false applications for engine certification approvals and altered emission test data.

The company also conducted tests improperly and fabricated data without conducting any underlying tests.

Hino President Satoshi Ogiso said the company had 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 a 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 found inconsistencies in the emissions data.

"Hino knowingly took unlawful advantage of California’s incentives designed to accelerate the adoption of clean transportation technologies," said California Attorney General Rob Bonta.

"These technologies safeguard the health and safety of Californians from pollution."

Hino said it booked an extraordinary loss of ¥230bn, or about $1.54bn, in its second-quarter results in October to cover the expected costs of resolving the litigation.

Over the last decade, several automakers admitted to selling vehicles with excess diesel emissions, including Volkswagen.

The company paid more than $20bn in fines, penalties, and settlements after it admitted in 2015 to cheating emissions tests by installing "defeat devices" and sophisticated software in nearly 11mn vehicles worldwide.

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