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Volvo warns its engines may exceed emission limits

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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.

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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.

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Yup  same old same old dollar store DPF! By their own hand!  Fitting!

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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.”

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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.

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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.

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