Volvo Group North America has reached a settlement with the California Air Resources Board related to allegations concerning the description of certain emission controls on model year 2010-2016 engines installed in trucks sold in California. According to Volvo Group, the settlement is without admission of liability, and an internal review found no evidence that anyone acted in bad faith.
Under the settlement, Volvo Group has agreed to pay $12.5 million in civil penalties and $71 million to CARB’s Air Pollution Control Fund. The company will also spend $108 million on California emission-reduction projects under a plan to be submitted to CARB for approval within one year and will reimburse $5 million in CARB costs.
Volvo Group said the settlement will result in a $196.5 million negative impact to its second-quarter 2026 operating income. The company said that impact will be excluded from adjusted operating income. The company also expects operating cash flow in the second quarter to be negatively impacted by $89 million, with the remaining cash flow effect expected during the next five years.
As part of the settlement, Volvo Group will make software updates and a partial warranty extension available for approximately 7,200 model year 2014-2016 engines in California. The company said there are no performance or safety issues associated with the engines in question.
Volvo Group said it proactively disclosed the issues that were the subject of CARB’s concerns nearly a decade ago and has worked cooperatively with CARB to resolve the matter. The company also stated that it is not aware of any additional investigations related to its engines’ emissions compliance in the U.S.
The settlement adds a new financial and compliance-related development for Volvo Group North America while also directing funding toward California emission-reduction projects. Volvo Group said it has always intended to comply with applicable regulations and conducts testing to ensure its engines meet emissions requirements.
