Volvo Group settles California emissions

Volvo has agreed to a $197 million settlement with the United States — California Air Resources Board (CARB) to resolve allegations of emissions violations. The violations stem from Volvo's alleged failure to properly disclose auxiliary emission control devices in over 10,000 heavy-duty engines from model years 2010-2016 sold in United States — California, resulting in emissions exceeding regulatory limits. As part of the settlement, Volvo will pay $13 million in civil penalties, contribute $71 million to CARB's Air Pollution Control Fund, spend $108 million on United States — California emissions-reduction projects, and reimburse $5 million of CARB's costs. The company will also provide software updates and a partial warranty extension for approximately 7,200 engines in United States — California. Volvo expects to record a $197 million charge to its second-quarter operating results and a negative $89 million impact on operating cash flow in the current quarter, with the remaining cash outflows spread over the next five years. Volvo stated that an internal review found no evidence of bad faith and the agreement does not include any admission of liability.