Truckmaker Volvo to take $197 million earnings hit from California emissions settlement

HELSINKI, May 18 (Reuters) - Truckmaker Volvo Group VOLVb.ST said on Monday its second-quarter operating result would take a $197 million hit from a settlement its North America unit has reached with California Air Resources Board (CARB).

  • The settlement resolves allegations by CARB about the adequacy of descriptions of emission controls on 2010–2016 engines in trucks sold in California, Volvo said in a statement.

  • Volvo will pay $13 million in civil penalties, $71 million to CARB’s Air Pollution Control Fund, spend $108 million on California emissions‑reduction projects and reimburse $5 million of CARB’s costs, the truckmaker said.

  • As part of the settlement, Volvo will make software updates and a partial warranty extension available for about 7,200 engines in California.

  • Volvo said the settlement is without admission of liability and that an internal review found no evidence of bad faith.

  • The company said the charge will be excluded from adjusted operating income and that the operating cash-flow impact in the ongoing quarter would be $89 million, with the remaining cash outflows spread over the next five years.

  • The Volvo Group will report its second-quarter results on July 17.


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