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

Volvo AB

18/05/2026 17:51

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.

 (Reporting by Essi Lehto, editing by Tomasz Janowski)

 ((essi.lehto@thomsonreuters.com; +358 50 541 2375))