Hino agrees to plead guilty, pay $1.6B over emissions fraud
Hino Motors is pleading guilty over alleged emissions fraud pertaining to heavy-duty engines imported and sold in the U.S. The Toyota subsidiary will pay more than $1.6 billion “for violations related to the submission of false and fraudulent engine emission testing and fuel consumption data to regulators and the illicit smuggling of engines into the United States,” a statement from the U.S. Environmental Protection Agency revealed.
California Air Resources Board also noted that “Hino failed to disclose Auxiliary Emission Control Devices that affected the emissions control systems resulting in increased oxides of nitrogen (NOx) emissions, making them unapproved. Hino also conducted unreported and unapproved running changes and field fixes.”
The EPA said the falsified data sent to the EPA and California regulators allowed Hino to improperly gain approval to import and sell about 110,000 heavy-duty engines in U.S. from 2010 to 2022. The model years ranged from 2010-2019 for on-road and 2011-2019 for off-road.
The government discovered the fraud during confirmatory testing of Hino’s engines, where the EPA found that Hino’s engine emitted more NOx, particulate matter, carbon dioxide, and nitrous oxide than regulations allow. The agency on January 10 voided engine approvals for Hino’s 2010-2019 diesel engines—the largest voiding action ever taken by EPA.
National Highway Traffic Safety Administration, also involved in the ivestigation, noted Hino "submitted false or fraudulent carbon dioxide emissions test data for the model year 2017 and 2018 J05E engines, resulting in false fuel consumption values being submitted for Hino’s heavy-duty engines."
Hino is currently working on a software fix to resolve the emissions overages and vehicle owners will receive a letter to schedule the repairs once the EPA and CARB approve them. Hino will also issue a new extended warranty for the emissions control system following the repairs.
New Hino trucks are equipped with third-party engines and will not be affected.
“Hino knew the requirements that engines must meet to be certified to operate in the United States, yet it falsified data for years to skirt regulations,” said Todd Kim, assistant attorney general of the Justice Department’s Environment and Natural Resources Division. “Hino’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.”
As part of the resolutions, Hino agrees to plead guilty to a multi-year criminal conspiracy, pay a civil penalty of $525 million, forfeit $1.087 billion related to the fraud, serve a probation against importing diesel engines, and implement a compliance program. The resolution is the second largest criminal fine in the history of EPA’s mobile source program.
Some of these payments will go to Hino's implementation of an emissions mitigation program valued at $155 million and a recall program valued at $144.2 million for 2017-2019 heavy-duty truck engines. The subsidiary's payments will also fund $123.6 million for mitigation costs in California and pay $30.3 million to resolve California False Claims Act claims.
Hino issued a statement on the settlement after its announcement. The subsidiary said that it voluntarily disclosed the issues to U.S. authorities in 2019 and provided what the U.S. Department of Justice described as "exemplary" cooperation.
“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. We deeply apologize for the inconvenience caused to our customers and stakeholders," said Satoshi Ogiso, president and CEO of Hino Motors in the statement. "In order to prevent a recurrence of this kind of issue, we have implemented company-wide reforms, including meaningful improvements to our internal culture, oversight, and compliance practices."
