Volvo earmarks $780M to address emissions system degradation issue

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Updated Jan 7, 2019

Volvo Group 300x121Volvo Group, the global umbrella company of Volvo Trucks North America, announced it is setting aside $778 million to address instances of degradation of its emissions control components on heavy-duty truck engines. The degradation could put the engines out of compliance with emissions standards in Europe and the U.S.

Volvo announced the discovery of the degradation issue in October, saying then that it likely affects engines for both the North American and European markets. The affected component is part of the exhaust aftertreatment system, also known as the selective catalytic reduction (SCR) system. These systems were implemented in nearly all Class 8 truck engines in the U.S. to meet 2010 emissions standards and have been in use ever since.

The company is still in the early stages of remedying the issue, says Claes Eliasson, head of media relations, Volvo Group. The $778 million charge, taken in 2018’s fourth quarter, is “the calculated costs for Volvo Group for this issue,” he says.

Specifics as to the company’s plan for repairs or potential recalls, as well as what truck models are affected, are still being fleshed out, Eliasson says.

“When it comes to remedies, we are still looking at options,” he says, adding the company is “engaged in dialogue with relevant authorities. It’s too soon to say what it will look like.”

The $778 million figure is based on vehicle testing and “statistical analysis and dialogue with relevant authorities,” Volvo stated in an announcement. The company also notes that the emissions component degradation issue does not affect engine performance nor is it a safety issue. Also, the company says, the engines met emissions standards when they were built.

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