Toyota will pay a $ 180 million fine for failing to comply with the Clean Air Act’s emissions reporting requirements from 2005-2015, according to the U.S. Department of Justice.
During the period, Toyota delayed the required submission of emission errors and did not notify the EPA of the progress of repairs related to emission errors. This has led to higher emissions, higher costs for consumers and greater profits for Toyota.
Emission regulations are largely dependent on a “self-disclosure” system where manufacturers are responsible for submitting reports in which they comply. During the ten-year period, Toyota delayed the submission of 78 emission reports, some of which were sent up to eight years late. The company also did not submit 20 emissions recall reports and more than 200 quarterly emissions reminders.
In a press release, the DOJ says:
Toyota’s behavior has likely led to delayed or avoidable reminders, with Toyota gaining a significant economic advantage, putting costs on consumers and extending the time that repairable vehicles with emission-related defects remained on the road.
The ‘significant economic benefit’ Toyota has gained from these actions is never calculated or explained in the government’s complaint. From 2005-2015, Toyota sold between 1.5 and 2 million cars in the US per year, which means that this fine was sold for about $ 10 per car during that period (not the time value of money). In other words, Toyota’s one-time global revenue for 2019 was $ 272 billion, more than 1,500 times higher than this fine for ten years of non-compliance.
This is not the first time Toyota has received a sanction for violations. In 2003, the carmaker was fined $ 20 million for selling 2.2 million vehicles with inadequate diagnostic systems on board. The consent decision that resolved the offense was only terminated in 2014 – nine years after the offenses covered by the current settlement.
Today’s fine is ‘the largest civil fine for violating the EPA’s emission reporting requirements’, although there have been fines against other car manufacturers for other violations. VW had to pay $ 25 billion and Daimler $ 2.2 billion for their inclusion of emission testing devices in their cars over a similar period of time as Toyota’s violations occurred.
In addition to the $ 180 million fine, Toyota will have to act under mandate to ensure that they continue to meet emissions reporting requirements.
Toyota’s green (crop) image
Toyota has long cultivated an image of responsibility for the environment, and is one of the first car manufacturers to introduce hybrid vehicles on the road. The Prius has become the best-selling hybrid car in the US and has become a widely recognized symbol of environmental responsibility.
But the ejection of Toyota’s fleet tells a different story. Its U.S. Navy contains many trucks and sports utility vehicles with above-average emissions, giving them the worst results in total fleet emissions. We’ve written before about Toyota’s consistently low fleet efficiency (although things are going slightly better with updated numbers for 2019).
In addition to (and perhaps because of) its poor efficiency, Toyota was one of the best-known companies to join a lawsuit filed by the fossil lobbyist EPA against higher efficiency standards, along with GM, Fiat Chrysler and others. Reducing efficiency standards will kill Americans and cost money, according to the EPA’s analysis.
The company is also against electric vehicles and has presented science-illiterate anti-EV ads and repeatedly disseminated other disinformation about EVs. Toyota does not currently sell electric batteries and one fuel cell, the Toyota Mirai. Toyota’s roadmap does show possible future electric vehicles, but we still have little information about it.
It seems likely that Toyota’s opposition to electric cars has affected the recently announced ‘gas ban’ in Japan. Toyota is the largest company in Japan with a large margin (double the revenue of Honda # 2). The proposed ban does not actually ban gas engines, as it will still allow the sale of new hybrids, which get 100% of their energy input from gasoline.
Important timing
Toyota’s violations come at a similar time frame to the “diesel-hole” emissions scandal that rocked VW and many other manufacturers. Dieselgate fraud devices were used by VW between 2009 and 2015, and Toyota’s emissions were not from 2005 to 2015.
But in this same decade, governments around the world have finally begun to wake up and take action on what we have known for decades – that the world is rapidly warming up due to human activities.
Transportation is one of the largest emission sources in the world and is the largest emissions sector in the US. Car manufacturers will therefore play a major role in avoiding the worst disasters of the global climate crisis.
Instead, carmakers have chosen to counter the effort by undermining systems that require governments to have reliable data if they are to draft emission regulations that work for everyone. Toyota had hoped that consumers would give them credit for their slightly cleaner Prius, while hiding from the government their poor efficiency and the breaches of emission rules that they had been hiding for a decade.
We need good data if we are going to solve our problems and develop an international plan of action, and we do not have time to waste cleaning up our act. Incomplete information, due to Toyota’s deliberate misreporting, can only harm our efforts to solve our collective problem.
Electrek’s Take
We do not know (and perhaps may not) whether this particular fine is sufficient to compensate the total benefit that Toyota has received from their actions or the total increased costs that consumers have suffered from it. But Toyota’s willingness to engage with the government instead of waging a battle suggests he thinks it’s going easy.
When individuals are convicted of fraud or theft, they can (or do not) benefit from it. If someone robs $ 10,000 from a bank, they will not receive a $ 1,000 fine and are told to continue their business. However, companies that regularly violate environmental regulations get this treatment all too often – not only in the car, but also in other polluting industries. It must stop – and businesses that break the rules may not be allowed to benefit from it.
And from the perspective of deterrence, fines so far have been apparently too small to encourage compliance. Although Toyota was fined in 2003 for emission violations, in 2005, just two years later, they resumed violating emission regulations, and this lasted for another decade. Clearly, the original punishment was not enough. The fine of today, which represents a small fraction of what Toyota makes year-on-year, may also be too low.
But it’s not just Toyota – it’s starting to look like every manufacturer is caught up in some kind of exhaust scandal. And if that is the case, there is clearly a problem with the enforcement mechanisms that the government has in place, and those mechanisms could benefit from some reform.
Since companies apparently do not want to regulate, we need more independent eyes to hold them accountable. The cost of this additional regulation must fall on the car companies, which have been too long past the existing systems and have increased the cost to consumers and imposed environmental damage on which we all suffer.
Or hey, here’s an idea. Maybe we should switch to vehicles that do not even has an exhaust pipe from which emissions can come, which can have no faults in the exhaust system or other emission management systems, because it does not produce exhaust gas at all. Then the businesses do not have to worry about installing cheat devices because there are no exhaust fumes to cheat.
Since this problem is so prevalent among gas vehicles, it may be time to give up completely.
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