Settlement includes penalties, emissions projects, and software updates for 7,200 engines after excess emissions allegations.
Volvo Group will pay $197 million to settle allegations of violating California’s heavy-duty engine emissions regulations. The agreement resolves claims that the company failed to disclose auxiliary emission control devices in over 10,000 engines from 2010-2016, leading to excess emissions, according to state regulators.
The settlement includes $13 million in civil penalties, $71 million for California’s Air Pollution Control Fund, $108 million for emissions-reduction projects, and $5 million to cover investigation costs. Volvo will also update software and extend warranties for approximately 7,200 engines in the state.
Volvo will record a $197 million charge in its second-quarter results, excluding it from adjusted operating income. The company expects an $89 million cash-flow impact in the current quarter, with remaining payments spread over five years.