Toyota’s subsidiary to settle emissions scandal for $1.6bn

Toyota’s subsidiary, Hino Motors, has agreed to a $1.6 billion (£1.3 billion) settlement and will plead guilty to misleading U.S. regulators about the emissions output of its diesel engines.

As part of the agreement, Hino will be prohibited from exporting its diesel engines to the U.S. for five years.

The settlement follows charges of fraud filed in a Detroit court, accusing Hino of selling 105,000 non-compliant engines in the U.S. between 2010 and 2022.

Approval from a U.S. court is still required for the settlement to take effect.

The U.S. Justice Department stated that Hino engaged in a “criminal conspiracy” by submitting “false and fraudulent” emissions and fuel consumption data, enabling the company to import and sell its engines in the U.S. market.

“Hino Motors engaged in a years-long scheme to alter and fabricate emissions data in order to get a leg up over its competitors and boost their bottom-line,” said FBI Director Christopher Wray.

“To further this fraudulent scheme, Hino violated laws and regulations intended to protect American’s health and the environment.”

On top of the five-year diesel engine import ban, Hino has also committed to a compliance and ethics plan during that period.

“We take this resolution seriously and will ensure that the field fix, the Environmental Mitigation Program, and further strengthening of our compliance system … are implemented,” said Satoshi Ogiso, Hino’s chief executive and president in a statement.

“We deeply apologize for the inconvenience caused to our customers and stakeholders.”

The U.S. Environmental Protection Agency announced that Hino has agreed to recall certain non-compliant heavy-duty trucks and replace marine and locomotive engines nationwide to mitigate the excess air emissions.

To cover the costs associated with its legal issues, Hino reported an extraordinary loss of 230 billion yen (£1.2 billion, $1.48 billion) in its second-quarter financial results released in October.

Over the past decade, several automakers have admitted to falsifying emissions data for their diesel engines.

This scandal, known as “Dieselgate,” involved multiple brands within the Volkswagen group, including Audi, Porsche, Seat, and Skoda, as well as Volkswagen itself.

Volkswagen has spent over 30 billion euros (£25 billion, $30.9 billion) on fines, recalls, and customer compensation in connection with the scandal.