Good morning! It’s Thursday, January 16, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Toyota’s Hino Motors Fined Over Diesel Emissions
Toyota was caught up in an emission scandal with one of its engine manufacturers last year, and another brand under the automotive giant was accused of falsifying safety certificates on some models. Now, the company has been hit with an enormous fine over diesel engine emissions from one of its truck-building subsidiaries.
Toyota-owned truck builder Hino Motors was charged with fraud on January 15 in the U.S. District Court in Detroit, reports the Detroit Free Press. The company was fined $1.2 billion after investigators found that it unlawfully sold more than 100,000 heavy-duty diesel engines that did not meet emissions standards:
A report by Nikkei Asia said that Hino was expected to settle the allegations and pay a fine of $1.2 billion.
A company-commissioned panel said in a report in 2022 Hino had falsified emissions data on some engines going back to at least 2003, or more than a decade earlier than previously indicated. The Justice Department said Hino, whose U.S. headquarters is in Farmington Hills, had sold engines that did not comply beginning in 2010 through 2022.
The settlement seeks to close the books on the engine misconduct in the U.S., but related expenses, such as those for recalls and repairs, are expected to come to around $300 million in the U.S., bringing the final burden to around $1.5 billion.
In total, Hino Motors must pay more than $500 million in criminal penalties as well as $442 million in civil penalties that will go to authorities in the U.S. The automaker must also pay $236 million to the state of California.
The company has also been ordered to launch a “mitigation program to offset excess air emissions” released by the illegal engines, which is valued at around $155 million, adds Automotive News. A recall and repair program that could cost an additional $144.2 million will also be launched, which will bring the total costs headed Toyota’s way to $1.5 billion.
The fine for Hino Motors follows similarly harsh penalties for Stellantis, which was fined more than $800 million in 2022 for irregularities in its emissions. GM was also fined $146 million after it was found that millions of its cars had failed emissions tests, and engine maker Cummins was also fined for selling emission test-cheating devices.
And who can forget Volkswagen, which kicked off the emission scandal in the U.S way back in 2015 when it was found to have cheated on emission tests for almost half a million TDI cars sold across the U.S.
2nd Gear: Chinese Automakers Are Eying VW’s Doomed Factories
Volkswagen has made no secret that it needs to cut costs in order to survive. The German automaker says it has a handful of years to try and turn around its fortunes, and factory closures in Europe are seen as one of the best options. One automaker’s loss is another’s gain, as they say, and Chinese automakers may be set to pounce on any facilities VW closes.
Chinese automakers like BYD and Geely are increasingly looking to expand their footprint in Europe as they attempt to skirt tariffs on imports from China. Now, the solution to their problems could be to buy up factories that VW hopes to close, reports Automotive News:
Buying a factory would allow China to build influence in Germany’s prized auto industry, home to some of the oldest and most prestigious car brands, the person said.
Chinese companies have invested across a range of industries in Germany, Europe’s biggest economy, from telecommunications to robotics but have yet to set up traditional car manufacturing there, despite Mercedes-Benz having two large Chinese shareholders.
Any such move could mark China’s most politically sensitive investment yet. VW has long been a symbol of Germany’s industrial prowess, now threatened by a global economic slowdown hitting demand and a creaking transition to green technologies.
The move would circumnavigate tariffs on Chinese imports in Europe, but may not provide the bypass to America that Chinese brands are hoping for. That’s because restrictions on Chinese imports here in the Land Of The Free also extend to Chinese intellectual property and tech developed in China.
Purchase of factories in Europe would be smart as Chinese brands look to expand their footprint in the region. It would allow them to remain competitive against European brands, despite the continent’s best efforts to hamper their growth through increased tariffs and import controls.
3rd Gear: Of Course Trump’s DOT Pick Will Review SpaceX’s Fines
In the days after it was announced that convicted felon Donald Trump had won the U.S. election, things started looking up for billionaire Elon Musk, who plowed millions into Trump’s reelection campaign. Now, the good news for Musk keeps coming, as Trump’s pick to lead the Department of Transportation says they’re prepared to review fines that Musk’s space travel firm has received in recent months.
SpaceX is facing fines of $600,000 over its launches last year, and now Transportation Secretary nominee Sean Duffy says he’s prepared to take another look at those penalties, reports Bloomberg. Duffy told reporters that he is ready to look into “what’s been happening at the FAA with regard to the launches,” if he’s sworn in:
The FAA in September proposed hitting SpaceX with as much as $633,009 in civil penalties over allegations that the rocket company led by Elon Musk violated license requirements during two rocket launches in 2023. The move drew the ire of Musk, who described the proposal as “lawfare” and threatened to sue the FAA for “regulatory overreach.” A spokesperson for the FAA said Wednesday that the cases around the proposed penalties remain open.
Duffy, if confirmed, will lead a department that directly oversees two of Musk’s businesses, SpaceX and his car company Tesla Inc. His comments during the hearing showcase how he’ll have to navigate the priorities of the outspoken billionaire who’s also become a close adviser to Trump and spent millions of dollars to help the president-elect and other Republican candidates during the 2024 election.
Duffy’s comments follow months of complaints from Musk and SpaceX president Gwynne Shotwell, who both claim that the FAA is “holding back” the company, adds Bloomberg. They are calling for the agency to become more nimble and fast-acting when it comes to approving launch schedules for companies like SpaceX and Blue Origin.
FAA administrator Michael Whitaker previously announced that they would step down from the job on January 20 when Trump takes office. The “Home Alone 2" actor hasn’t yet revealed who could take the job, but it’s no doubt going to be another millionaire who waits at his beck and call.
4th Gear: Cruise Pedestrian Safety Probe Closed Following Recalls
General Motors might have pulled the plug on self-driving taxi firm Cruise late last year, but that doesn’t mean the troubled autonomous vehicle company was out of the woods just yet. The company was embroiled in a probe investigating pedestrian safety concerns among autonomous vehicles that has just come to an end.
The National Highway Traffic Safety Administration opened a probe into Cruise’s pedestrian safety measures in October 2023 following five incidents involving collisions with pedestrians, reports Automotive News. Now, safety regulators have closed the probe after recalls and updates to Cruise cars were said to fix the issues raised:
NHTSA had also raised concerns about two incidents involving Cruise vehicles driving near pedestrians on crosswalks.
In ending its investigation, NHTSA cited Cruise’s November 2023 recall to address concerns and GM’s decision to cease Cruise business operations. The agency noted that no versions of its Cruise self-driving vehicles were operating on public roads.
GM said in December it was ending robotaxi development at its majority-owned, money-losing Cruise business and would no longer fund work on self-driving robotaxis. GM had invested more than $10 billion in Cruise since 2016 and the unit is being folded into the automaker’s group working on driver assistance technology.
The end of Cruise’s operation in the U.S. does rather make the closure of the probe a moot point, but it does at least bring the whole sorry story of the company’s rollout to a close. After deploying thousands of autonomous taxis to streets in Austin, Texas, and San Francisco, California, Cruise offered rides to more than 60,000 raiders a month.
Instead of plowing more money into the loss-making endeavor, GM will instead direct the funds to its Super Cruise technology, which is available in its mass-market models.