The COVID-19 global pandemic is expected to affect Toyota's overall sales in 2020 and its financial position for the fiscal year ending March 31, 2021. Adding to the financial woes of Toyota is that it has to pay $180 million to the United States Environmental Protection Agency (EPA) to settle a civil lawsuit over a failure to report emissions-related defects on time.
All Carmakers Required To Report Emission-Related Defects
Under the Clean Air Act, carmakers have to report potential defects and recalls affecting vehicle components designed to control emissions. They need to file an Emissions Defect Information Report (EDIR) when 25 or more vehicles or engines of a certain model exhibit the same emission-related defect. They also need to file a Voluntary Emissions Recall Report (VERR) with the EPA when recalling vehicles to correct such defects.
EPA considers these EDIR and VERR reports as critical compliance tools to ensure that all vehicles on the road are compliant with federal emissions standards. More importantly, these reports help the Act protect the environment and human health from harmful air pollutants.
Toyota Failed To Submit Compliance Reports For 10 Years
The EPA and US Department of Justice alleges that Toyota systematically violated the Clean Air Act's defect reporting from 2005 to late 2015. Within this period, Toyota delayed filing 78 EDIRs, some of which were filed eight years late. In addition, Toyota failed to file 20 VERRs and more than 200 quarterly reports.
According to EPA, Toyota's action within the period deprived the agency of timely information over emission-related defects and recalls. It added that the carmaker's actions might have led to delayed or avoided recalls, which means Toyota may have economically benefited from the situation. Furthermore, Toyota's actions lengthened the time that defective vehicles remained on the road.
Toyota To Pay $180 Million To Settle Violations
The US government has filed a consent decree to resolve the case by requiring Toyota to pay $180 in million civil penalty and imposing injunctive relief against the Japanese carmaker. Toyota has agreed with the consent decree, which is still subject to public comment and court approval.
To note, the $180-million penalty imposed against Toyota is considered the largest civil penalty meted to a company for violating EPA’s emission-reporting requirements.
Source: US Environmental Protection Agency