Jump to content

Volvo Engines Exceed Emissions Limits


kscarbel2
 Share

Recommended Posts

Volvo warns its engines may exceed emission limits

Reuters  /  October 16, 2018

Sweden’s Volvo said on Tuesday an emissions control component used in its vehicles was degrading more quickly than expected, which could cause engines to exceed emission limits for nitrogen oxides, sending its stock down sharply.

The problem is the catalyst converter, Volvo investor relations director Anders Christensson said, refusing to name the supplier or say whether Volvo would terminate the relationship.

"In certain applications when the engine is not running hot enough you get condensation water in there and that causes this problem. You get a warning signal in the dashboard saying you're running above nitrogen oxide levels," he explained.

Volvo Group, which makes trucks, construction equipment and buses, said the largest volume of potentially affected engines had been sold in North America and Europe, its two largest markets, and that costs to fix the problem “could be material”.

The issue could become an added headache for Volvo, which has been working hard to protect profitability after a surge in demand in Europe and North America caused supply chain bottlenecks, inflating costs for raw materials and labour.

Volvo’s shares were down 6 percent at 133.60 Swedish crowns at 0722 GMT, making it easily the biggest faller on Stockholm’s blue chip index.

Volvo, which sold 143,373 trucks in Europe and North America last year, said it was in the process of informing authorities.

A spokesman said Volvo had spoken to authorities in North America and Europe, where emission regulations are strictest, but there were no plans yet to recall any vehicles.

Link to comment
Share on other sites

Volvo's supplier is Eberspacher, who is an extremely reputable supplier. However, I can imagine that they dictated a Volvo-design based on low price.

Of course Mack brand trucks have the same Volvo Group components.

Scania purchases their after-treatment system from Forest Lake, Illinois-based Tenneco and has no issues.

Link to comment
Share on other sites

Volvo doesn’t know how many North American trucks are affected

Transport Topics  /  October 16, 2018

Volvo Group said it could not yet determine the impact of a faulty component on its North American trucks as it was still evaluating the scope of the problem.

“We cannot provide [the number of affected vehicles in North America] because any number is potentially misleading,” Volvo spokesman Claes Eliasson said in an e-mail. “It’s not clear at this point what percentage of the population might experience the issue, and over what time period.”

Link to comment
Share on other sites

U.S. environmental agency says in talks with Volvo over emissions issue

Reuters  /  October 17, 2018

The U.S. Environmental Protection Agency said on Wednesday it has been in [secret] talks with Volvo over the last few weeks about an issue with catalytic converters causing some of its vehicles to exceed nitrogen oxide emission limits.

Volvo warned a day earlier that some of its truck and bus engines could be exceeding limits for nitrogen oxide emissions due to an emissions control component it uses degrading more quickly than expected.

The Swedish truckmaker said it could face material costs to deal with the issue largely affecting trucks and buses sold in North America and Europe, its two largest markets, and that it was working with authorities to find a solution.

The EPA, in an emailed statement, told Reuters on Wednesday that the agency was aware of the situation, which it said involved Volvo heavy duty trucks.

"Over the last few weeks, EPA and the California Air Resources Board (CARB) have been communicating with Volvo about the problem and are now continuing to meet with the company to develop plans to quickly address this situation," the EPA statement said.

A U.S. government official briefed on the matter said on Wednesday that regulators do not believe excess emissions are the result of a "defeat device" or intentional misconduct as in the case of Volkswagen AG's excess diesel emissions, but rather is believed to be the result of a faulty component and a recall is expected.

Asked why Volvo had waited a couple of weeks before informing the market, a Volvo spokesman said the company needed to determine whether this would be a large issue and it was standard protocol to inform authorities first.

"Authorities and legal bodies are normally informed prior to the markets because we inform them even if the problem is very, very small," he said.

Volvo did not say when the affected trucks were sold or how many are impacted. It said that all products equipped with the component met emissions limits at delivery.

The company sold 51,693 trucks in North America last year and another 115,863 in Europe.

EPA and CARB refused to comment about how many trucks were involved, while a spokesman for Volvo said it was too early to know.

"We... are working with the company to more fully understand what's going on," a spokesman for CARB said in a brief separate comment, without giving more details.

Link to comment
Share on other sites

  • 2 months later...

Volvo sets aside $800m for costs over ‘emissions control’ issue

Sylvia Pfeifer, Financial Times  /  January 3, 2019

Volvo Group has said it will set aside Skr7bn (US$780 million) to cover potential costs related to the admission that its trucks could be emitting higher levels of poisonous nitrogen oxide gases than is legal.

The company revealed in October that the “emissions control component” in its vehicles was wearing out faster than expected, sending its shares down more than 6 per cent on the day of the announcement. At the time Volvo predicted a “material” cost from the issue.

The Swedish group said on Thursday that the estimated costs were based on “several factors” such as vehicle testing and statistical analysis, as well as “dialogue with relevant authorities”.

“The next step will be to define how to implement corrective actions concerning the component in vehicles affected by this issue,” Volvo said in a statement released after European markets had closed.

Shares in the company closed at Skr113.85 on Thursday in Stockholm, down from a six-month high of Skr160.85 at the start of last October.

The provision will impair operating income in the fourth quarter of 2018, while the negative cash flow effect will start in 2019 and gradually ramp up in the coming years, the company said.

“The Volvo Group will continuously assess the size of the provision as the matter develops,” it added.

Volvo said the degradation of the component did not pose a product safety issue. All engines and vehicles equipped with the component “meet emissions limits at delivery”, it added.

Link to comment
Share on other sites

13 hours ago, Ezrider said:

and some people wonder why i run a 19 year old truck. 

Most are probably jealous of your trouble free pre-emissions ride that runs every single day. 

  • Like 2

The problems we face today exist because the people who work for a living are outnumbered by the people who vote for a living.

The government can only "give" someone what they first take from another.

Link to comment
Share on other sites

As the road gets bumpier for truckmakers, AB Volvo faces emissions pothole

Esha Vaish, Reuters  /  January 25, 2019

Swedish truckmaker AB Volvo’s attempts to cope with a weakening global market are being complicated by problems with a component that do not appear to be affecting its main rivals.

Volvo said in October some of its engines could be exceeding emission limits of toxic nitrogen oxides (NOx) because catalytic converters in its emissions after-treatment systems were wearing down more quickly than expected in certain situations.

This fueled speculation that rivals Volkswagen and Daimler could have the same problem, after Volvo said it sourced converters from a single external supplier. Johnson Matthey, Umicore and BASF have a triopoly in that supply market.

However, representatives for Volkswagen’s truck group Traton, which houses the MAN, Scania and VW brands, as well as Daimler have told Reuters their firms have not had any issues.

Traton vehicles are meeting NOx emission limits on delivery and also over time, a spokesman said, while a Daimler spokesman said “all indications are that we achieve the targeted service lives” for NOx system components in its trucks.

Volvo’s problem is a distraction at a time when demand prospects look weaker in China, the world’s largest commercial vehicles market; growth in Europe is slowing; and order cancellation rates in North America are rising. Over the past few years, orders have boomed as operators renewed fleets starved of investment during the global financial market crash.

“We now factor in a cyclical downturn in 2019-20, with the U.S. order bubble an added risk,” Societe Generale analysts wrote on Jan. 14, downgrading Volvo to “sell” from “hold” and forecasting its adjusted operating income would fall 40 percent by 2020 versus 2018.

Volvo warned this month its operating income for the fourth quarter of 2018 would be hit by a 7 billion Swedish crowns ($779 million) provision to cover the cost of its emissions problems.

UBS cut its 2018 operating income forecast by 17 percent and said investors might worry “there may be more to come” as Volvo said it would continue to assess the provision size.

Volvo, which publishes 2018 results on Jan. 30, is expected to report adjusted operating profit of 40.53 billion crowns on sales of 388 billion, according to a Reuters poll of analysts. Daimler reports results on Feb. 6 and Volkswagen on March 12.

UNANSWERED QUESTIONS

Volvo has not said how many trucks might be affected by the emissions problem, and it is unclear what fix regulators might ask for, or whether its supplier might foot some of the bill.

However, Volvo has delivered up to 1.68 million trucks that could have the selective catalytic reduction (SCR) system, as regulations have meant that SCR has been a standard on Europe trucks since 2005 and on U.S trucks since 2010.

Volvo refused to named the supplier, though a previously unreported Volvo document shows it was Johnson Matthey, the world’s biggest supplier of catalytic coatings for diesel trucks. A Johnson Matthey spokeswoman refused to comment.

Johnson Matthey said in November it had been informed by two customers of failures in certain engine systems where it supplied “a particular coated substrate as a component” for emissions after-treatment systems. A previous report in March had only identified one affected customer.

Johnson Matthey, which has around 65-70 percent market share in U.S. trucks and about 60 percent in Europe trucks, took a charge of 50 million euros to settle a lawsuit related to the coated substrate last year.

Analysts have linked that lawsuit to truck-engines maker Cummins, which last year recalled about 500,000 trucks produced between 2010 and 2015 - also due to a catalyst degrading faster than expected. Cummins did not immediately respond to a request for comment.

A Umicore spokesman said the company had no exposure to Volvo engines, while a BASF spokeswoman said the problems Volvo was having with its emission systems were not due to any catalysts provided by her company.

Johnson Matthey’s report also said it had sold the “coated substrate” in question to only two customers.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...