At a Glance

  • Volvo Group North America will pay nearly $197 million to settle an emissions violation case with the California Air Resources Board (CARB), according to a May 18 press release.
  • CARB alleged that approximately 10,000 model-year 2010-2016 Volvo trucks used auxiliary emission control devices that were not disclosed during the emissions certification process required by California, violating the state's heavy-duty engine regulations.
  • As part of the settlement, Volvo Group will extend certain warranties and provide software updates for approximately 7,200 model-year 2014-2016 engines in California. The company did not admit liability.

Deep Dive

The settlement between Volvo Group and CARB marks one of the significant emissions enforcement actions against heavy-duty truck manufacturers in recent times, highlighting California's tough stance on diesel emissions compliance.

The case comes amid growing tensions between federal and state environmental policies.

While the U.S. Environmental Protection Agency (EPA) has moved to roll back national emissions rules, California continues to expand its regulatory authority and enforcement efforts under waivers granted by the Clean Air Act. California is also one of 24 states challenging the EPA's repeal of the Phase 3 greenhouse gas standards.

CARB alleged that Volvo Group's non-compliant engines emitted nitrogen oxides above certified thresholds. The settlement includes $108 million dedicated to California emissions reduction projects, with a one-year deadline for submission to CARB.

"This case underscores that CARB's compliance testing and vigorous enforcement are critical to protecting the state's air quality and public health. Our responsibility goes beyond setting regulations—we are committed to upholding them by identifying violations and holding companies accountable," CARB Chair Lauren Sanchez said in the press release.

Volvo Group said it cooperated with regulators during the investigation and disclosed the relevant issues nearly 10 years ago. The manufacturer added that an internal review found no evidence of malicious conduct by employees.

Volvo Group said its second-quarter operating income will be negatively impacted by $196.5 million, which will be excluded from adjusted operating income. The company also said second-quarter operating cash flow will be negatively impacted by $89 million, with the remaining negative impact of the settlement to be spread over the next five years.