Cummins has agreed to pay over $1.67 billion to settle allegations of illegally modifying hundreds of thousands of pickup truck engines to circumvent emissions tests.
The US Justice Department announced the tentative agreement, labeling Cummins’ actions as a breach of federal law mandating compliance with emission limits.
The proposed $1.675 billion fine is the largest civil penalty ever secured by the Justice Department under the Clear Air Act.
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It is the second-largest environmental penalty to date.
The DOJ accuses Cummins of installing defeat devices, capable of bypassing or disabling emission controls, on 630,000 Ram 2500 and 3500 pickup truck engines from 2013 to 2019.
From 2019 to 2023 the company allegedly placed undisclosed auxiliary emission control devices on 330,000 Ram 2500 and 3500 pickup truck engines.
Attorney General Merrick B. Garland said: “The types of devices we allege that Cummins installed in its engines to cheat federal environmental laws have a significant and harmful impact on people’s health and safety.
“Our preliminary estimates suggest that defeat devices on some Cummins engines have caused them to produce thousands of tons of excess emissions of nitrogen oxides.”
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Cummins, while not admitting wrongdoing, announced its cooperation with regulators.
The engine manufacturer pointed to its past actions, dating back to 2019.
Which includes a prior recall of 2019 Ram 2500 and 3500 trucks and an ongoing recall of 2013-2018 Ram 2500 and 3500 trucks.
Cummins said it previously set aside $59 million for estimated costs related to these recalls.
The firm also expects an additional charge of approximately $2.4 billion in the fourth quarter of 2023 to address these recalls.
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It encompasses around one million pickup truck applications in the US.
The agreement in principle involves the US and the State of California is awaiting final approvals before taking effect.
In response to this news Cummins faced a 3 percent decrease in its shares in the morning on Friday, December 22.
Last month, the Columbus, Indiana-based company reported a third-quarter net income of $656 million on revenue totaling $8.4 billion.
Stellantis, the maker of Ram vehicles, has not commentated on these developments.
