Toyota unit to settle emissions scandal for $1.6bn
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Hino Motors, a subsidiary of Toyota, has agreed to pay $1.6 billion (£1.3 billion) in a settlement and plead guilty to charges of deceiving U.S. regulators about the amount of harmful emissions produced by its diesel engines. The settlement, which still requires approval from a U.S. court, marks the resolution of a long-running legal dispute over the company’s fraudulent practices that allowed it to sell non-compliant diesel engines in the United States. In addition to the hefty financial settlement, Hino Motors will be banned from exporting its diesel engines to the U.S. for five years.
The settlement follows charges filed against Hino in a Detroit court, where the truck manufacturer was accused of selling a total of 105,000 illegal diesel engines in the U.S. between 2010 and 2022. According to the U.S. Justice Department, Hino Motors submitted “false and fraudulent” emissions testing and fuel consumption data, orchestrating a “criminal conspiracy” to bypass environmental regulations. This scheme was designed to secure a competitive edge over other manufacturers and to enhance profits by selling engines that did not meet the required emissions standards.
FBI Director Christopher Wray criticized Hino’s actions, stating that the company had engaged in a years-long scheme to manipulate emissions data in order to outperform competitors, while simultaneously violating laws designed to protect both public health and the environment. The scandal echoes a broader trend in the automotive industry, where several major car manufacturers have faced legal consequences for misleading regulators about the emissions produced by their diesel engines.
As part of the agreement, Hino Motors will not only pay the substantial fine but will also implement a series of corrective actions. The company has committed to a comprehensive compliance and ethics program, which will be in effect for the next five years. This program is designed to ensure the company’s operations align with U.S. environmental regulations and to prevent future fraudulent activity.
Satoshi Ogiso, Hino’s chief executive and president, expressed regret over the incident, emphasizing the company’s commitment to remedying the situation. “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,” Ogiso said. He also issued a formal apology to customers and stakeholders for the inconvenience caused by the scandal.
The U.S. Environmental Protection Agency (EPA) also played a significant role in the settlement. Hino Motors has agreed to recall certain affected heavy-duty trucks and replace marine and locomotive engines across the country to offset the excess air emissions caused by the faulty engines. This effort is part of a broader strategy to mitigate the environmental impact of the illegal engines sold over the past decade.
In response to the legal consequences, Hino reported a significant financial loss in its second-quarter results for the year. In October, the company announced an extraordinary loss of ¥230 billion (£1.2 billion, $1.48 billion) to cover the costs associated with its legal troubles. This financial setback follows the mounting legal and regulatory expenses the company faces as a result of the emissions scandal.
Hino Motors’ case adds to a growing list of automakers that have faced similar accusations over the past decade. The most notorious of these scandals is the “Dieselgate” scandal, which erupted in 2015 when Volkswagen was exposed for using software designed to cheat emissions tests. This resulted in major fines, recalls, and compensation for affected customers, and Volkswagen ultimately spent over €30 billion (£25 billion, $30.9 billion) to resolve the issue.
Other manufacturers, including Audi, Porsche, Seat, and Skoda—subsidiaries of Volkswagen—were also implicated in the scandal. The Dieselgate affair brought global scrutiny to the automotive industry and spurred governments and regulators worldwide to enforce stricter emissions testing and environmental standards. This led to greater public awareness of the issue and an industry-wide push toward cleaner, more sustainable vehicle technologies.
Hino Motors’ settlement is a significant moment in the ongoing global efforts to combat emissions fraud and ensure that companies adhere to environmental regulations. The actions taken by the U.S. government and the company’s commitment to compliance signal that automakers can no longer afford to cut corners when it comes to environmental standards. As the global automotive industry continues to transition toward electric and environmentally friendly technologies, cases like this highlight the growing importance of corporate responsibility and transparency in the fight against climate change.
The settlement will likely serve as a warning to other companies in the automotive industry that attempts to bypass emissions regulations can have serious financial and reputational consequences. For Hino Motors, the challenge now will be to rebuild trust with regulators, customers, and the public while ensuring that its operations remain fully compliant with all environmental standards moving forward.
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