Attorney General Bonta and California Air Resources Board announce nearly $237 million settlement with heavy-duty engine manufacturer Hino Motors, Ltd., a subsidiary of Toyota[...]

SACRAMENTO - California Attorney General Rob Bonta and the California Air Resources Board (CARB) today announced a $236.5 million settlement with heavy-duty engine manufacturer Hino Motors, Ltd., Hino Motors Manufacturing U.S.A. Inc. and Hino Motors Sales U.S.A. Inc. (collectively, Hino), a subsidiary of Toyota Motors Corporation. It is part of a larger federal settlement for $1.5 billion.

The settlement includes approximately $30.3 million to compensate CARB's Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) and settle the California Attorney General's claims that Hino fraudulently obtained low emissions vehicle subsidies from the state and allegedly violated California laws including the False Claims Act and Unfair Competition Law. The settlement also includes a payment of about $206 million to CARB for civil penalties and mitigation programs to reduce excess nitrogen oxide (NOx) emissions. Hino also agreed to provide a voluntary fix for some of the affected vehicles at no cost to owners.

CARB's investigation began in 2019 when Hino's certification applications were reviewed and found inconsistencies in the emissions data. CARB worked alongside the U.S. Environmental Protection Agency, and further testing revealed undisclosed and unapproved auxiliary emission control devices on 2010-2019 model year J05E and J08E heavy-duty engines used in both on-road trucks and off-road equipment. These engines were found to emit excess NOx, with some models emitting several times more than allowed by federal and state standards. NOx is an air pollutant that contributes to the formation of ozone and particulate matter. It can greatly aggravate health problems, such as asthma and cardio-pulmonary disease, and is a serious public health threat especially to disadvantaged communities that bear a disproportionate burden from air pollution.

"Hino knowingly took unlawful advantage of California's incentives designed to accelerate the adoption of clean transportation technologies, which safeguard the health and safety of Californians from pollution," said Attorney General Bonta. "At the California Department of Justice, we will continue to hold manufacturers like Hino accountable for breaking California's laws. I want to thank our federal and state partners for their collective work on reaching this critical settlement."

"CARB's rigorous air quality regulations protect communities from harmful pollutants that cause a host of serious health problems," said CARB Chair Liane Randolph. "Manufacturers should know that we will continue to use our enforcement authority to hold companies responsible when they try to skirt the rules to prioritize profit over public health. We appreciate Hino's cooperation during this investigation, and hope this settlement serves as a reminder of our shared responsibility to ensure clean air for all Californians."

The Attorney General's office found that Hino defrauded CARB into accepting Hino's trucks into the HVIP, a program that incentivizes the sale of approved hybrid vehicles, by using state funds to provide point-of-sale discounts. Hino qualified for HVIP incentive funding by falsely claiming that its trucks complied with state and federal law. The original misrepresentations occurred in 2012, and all Hino models approved for HVIP in the following eight years relied on the original HVIP approval. Under the HVIP, dealers were able to sell Hino trucks at discounted prices. The dealers would then submit vouchers to CARB for payment. The vouchers for each truck ranged from $7,500 to $37,000, and CARB received a total of 1,606 fraudulent vouchers.

After a voluntary disclosure by Hino of false statements in its HVIP application, the Attorney General found that Hino violated state laws including the False Claims Act and Unfair Competition Law. Hino regularly altered emission test data, conducted tests improperly, or entirely fabricated data without conducting any underlying tests. Hino also failed to disclose multiple software functions that could reduce the effectiveness of the emission control systems in their engines, increasing emissions that harm Californians' health and safety.

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