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Volvo to Pay $196.5 Million to Settle With CARB
OEM to Extend MY 2014-2016 D11, D13 Engine Warranties
Key Takeaways:
- Volvo Group North America agreed May 18 to pay $196.5 million to settle a California Air Resources Board emissions dispute involving model year 2010-2016 engines.
- CARB said Volvo inadequately disclosed auxiliary emission control devices on certain D11 and D13 engines, potentially increasing NOx emissions from trucks sold in California.
- Volvo denied wrongdoing, plans software updates and partial warranty extensions for about 7,200 engines and expects the settlement to reduce second-quarter operating profit.
Volvo Group North America will pay a total of $196.5 million to settle a dispute with the California Air Resources Board related to model year 2010-2016 engines, it said May 18.
The settlement is the latest in a series between truck and engine manufacturers and the California agency related to nitrogen oxide emissions.
The parent company of Volvo Trucks North America and Mack Trucks agreed to pay $12.5 million in civil fines, $71 million to CARB’s Air Pollution Control Fund, invest $108 million in emission reduction projects in California and reimburse $5 million of CARB’s costs.
Volvo failed to describe adequately certain auxiliary emission control devices in the engines, which may have resulted in increased NOx emissions entering the atmosphere from some of them, the settlement showed.
The engines concerned were D11 and D13 models installed in trucks sold in California. The Environmental Protection Agency codes for the engines are EVPTH10.8G01, EVPTH12.8G01, FVPTH10.8G01, FVPTH12.8G01, GVPTH10.8G01, and GVPTH12.8G01.
Volvo did not admit wrongdoing as part of the settlement. Volvo said it proactively disclosed the issues and will provide software updates and a partial warranty extension for about 7,200 model year 2014-2016 engines.
“There are no performance or safety issues associated with the engines in question,” the truck maker said.
The Swedish company said it is not aware of any further investigations regarding compliance with emission requirements for the company’s engines in the U.S.
Volvo Group’s operating profit for the second quarter of 2026 will take the full weight of the $196.5 million hit to earnings.
The company’s cash flow from operations in Q2 will decrease $89 million as a result of the settlement, while the remaining cash flow impact will be absorbed over the coming five years.
Volvo Group is scheduled to issue its Q2 earnings on July 17. A week earlier, the company will hold its 2026 capital markets day.
Previously, CARB inked settlements with Hino Motors and Cummins.
Classes 4-8 truck manufacturer Hino agreed to pay more than $1.6 billion in fines and mitigation project costs related to 105,000 model year 2010-2019 heavy-duty highway engines and roughly 5,700 model year 2011-2019 nonroad compression-ignition engines.
In 2024, engine manufacturer Cummins agreed to pay $2 billion to settle alleged violations related to devices that bypassed emissions sensors and AECDs on nearly 1 million model year 2013-2023 RAM 2500 and RAM 3500 pickup trucks, including about 97,000 in California.
