Toyota Subsidiary Agrees to Plead Guilty & Pay Over $1.6 Billion to Resolve Emissions Fraud Scheme

In a major settlement, Hino Motors, a subsidiary of Toyota Motor Corporation, has agreed to plead guilty to criminal conspiracy charges and pay a staggering $1.6 billion to resolve allegations of emissions fraud. The U.S. Department of Justice (DOJ), Environmental Protection Agency (EPA), and a host of other federal and state agencies announced the resolution, which includes criminal fines, civil penalties, and a series of corrective measures.

The settlement resolves years of illicit activities by Hino, which spanned from 2010 to 2022. The company was found to have submitted fraudulent engine emissions and fuel consumption data to regulators, securing approvals to import and sell over 110,000 diesel engines in the U.S. These engines, primarily used in heavy-duty trucks, did not meet the required emissions standards, leading to substantial air pollution and endangerment to public health.

“Hino Motors, a subsidiary of Toyota, engaged in a criminal conspiracy to mislead regulators and consumers, violating federal environmental laws and jeopardizing public health,” said Attorney General Merrick B. Garland. The scheme allowed Hino to import and sell engines that did not meet U.S. emissions standards, while intentionally falsifying test data to evade regulatory scrutiny.

The fraudulent conduct by Hino resulted in the widespread emission of pollutants such as nitrogen oxides (NOx) and particulate matter, substances linked to serious health risks like asthma, respiratory illnesses, and cardiovascular problems. The company’s actions also contributed to higher levels of climate-impacting greenhouse gases, including carbon dioxide (CO2) and nitrous oxide (N2O).

Assistant Attorney General Todd Kim emphasized the severity of the violation, saying, "Hino's actions led to vast amounts of excess air pollution and were an egregious violation of our nation’s environmental, consumer protection, and import laws."

Penalties & Corrective Measures

As part of the global resolution, Hino Motors will pay a criminal fine of $521.76 million and serve a five-year probationary period, during which it will be prohibited from importing any diesel engines manufactured by the company into the U.S. The company will also implement a comprehensive compliance and ethics program to prevent future violations.

In addition to the criminal fine, Hino will pay $525 million in civil penalties related to environmental, customs, and fuel economy violations. The settlement also includes the largest ever voiding action by the EPA, which recently revoked Hino’s engine certification approvals for 2010-2019 diesel engines, marking the largest voiding in EPA history.

“This is a reminder that no company is above the law,” said FBI Director Christopher Wray. “Hino’s deliberate falsification of data and illegal practices undermined laws designed to protect public health and the environment. The FBI remains committed to holding corporations accountable for their criminal actions.”

Mitigation & Environmental Impact

In addition to the financial penalties, Hino has agreed to fund several mitigation programs to offset the damage caused by its emissions violations. The company will invest in replacing older, dirtier marine and locomotive engines with those meeting strict EPA standards, a move expected to reduce emissions by at least 41,941 tons of NOx, 376 tons of particulate matter, and 6,199 tons of CO2.

Hino will also fund a recall program to modify violative engines in heavy-duty trucks, valued at $144.2 million. These actions are part of the company’s efforts to mitigate the environmental impact of its illegal conduct and restore compliance with U.S. and California emissions laws.

California Attorney General Rob Bonta expressed his commitment to holding manufacturers like Hino accountable for breaching state laws and taking advantage of environmental incentives designed to promote clean transportation technologies.

A Unified Effort

The case reflects a united effort by multiple agencies, including the DOJ, EPA, FBI, Customs and Border Protection (CBP), and the Department of Transportation’s Office of Inspector General (DOT-OIG), to combat corporate misconduct that undermines public health and environmental protections.

“Misleading federal regulators is a brazen crime,” said Inspector General Eric J. Soskin of DOT. “The settlement today is a clear message that we will hold manufacturers accountable for submitting false data that puts public health at risk.”

This settlement underscores the critical importance of environmental compliance, with agencies reiterating their commitment to ensuring that companies that prioritize profits over regulations will face the full force of the law. As Hino Motors faces these hefty penalties, the resolution sends a resounding message about corporate responsibility and the need for transparency in environmental matters.

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