Truck engine maker Cummins Inc. has agreed to the largest-ever assessment of a federal Clean Air Act violation in a proposed settlement over the company’s use of software defeat devices in diesel engines in hundreds of thousands of Ram 2500 and Ram 3500 pickup trucks.
Details of the settlement with Columbus, Indiana-based Cummins (NYSE: CMI) were jointly released by the U.S. Justice Department, the federal Environmental Protection Agency, the California Air Resources Board and the California Attorney General’s office, including $2 billion in fines.
“Cummins knowingly harmed people’s health and our environment when they skirted state emissions tests and requirements,” said California Attorney General Rob Bonta, in a news release. “Today’s settlement sends a clear message: If you break the law, we will hold you accountable.”
The settlement includes Cummins’ 6.7-liter diesel engine installed in about 97,000 engines in California and nearly 1 million vehicles nationwide.
Cummins operates a hydrogen fuel cell center at the Hydrogen Fuel Cell Partnership building in West Sacramento, where it is developing commercial applications for hydrogen fuel cells for busses and medium-duty and heavy trucks.
The proposed settlement resolves a state case and a federal case. The total settlement is more than $2 billion and includes a $1.675 billion federal penalty, the largest ever for a Clean Air Act case. California will receive approximately $164 million from the consent decree in the nationwide case. Additionally, the partial consent decree for the California case pays the state about $175 million for mitigation in addition to $33 million to the California attorney general for the company’s environmental violations and for unfair business practices. The state’s share of both consent decrees is over $372 million.
According to a news release, Cummins' software changed the diesel engine’s performance to meet emission standards during certification testing in the lab but shut down the emission control equipment during real-world driving. That is similar to emission-control defeat software that got Volkswagen AG in trouble in its emission scandal in 2015. In its software, Volkswagen’s “clean diesel” engines only engaged the full emission controls during testing and not in on-the-road driving.
The California Air Resources Board first discovered the defeat devices on Cummins' engines in model years 2013 to 2018 Ram 2500 and 3500 trucks. A subsequent EPA investigation found additional violations in 2019 to 2023 model year Ram 2500 and 3500 trucks.
Asked for comment, Cummins spokesman Jon Mills sent an email statement that the company announced the agreement in principle in December, and the announcement of the consent decrees Wednesday are "consistent with the previously announced settlement terms."
"Today marks another step toward concluding that four-year review," Cummins said. "We are looking forward to obtaining certainty as we conclude this lengthy matter and continue to deliver on our mission of powering a more prosperous world. We remain committed to advancing our Destination Zero strategy — Cummins’ vision for achieving a zero-emissions future."
The settlement also requires Cummins to work with Fiat Chrysler and its dealers on a vehicle recall and repair program that will remove all defeat devices from 2013 through 2019 Ram trucks free of charge. The recall requires dealers to bring the vehicles into compliance with applicable emissions standards under the Clean Air Act.
Under the settlement, Cummins must repair at least 85% of applicable vehicles within three years and it must offer an extended warranty covering emission control system parts on 2013-2019 Ram trucks that receive the replacement software.
