EPA Slaps Harley-Davidson with $12 Million Fine

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The Environmental Protection Agency (EPA) and the U.S. Department of Justice (DOJ) have just come to a settlement agreement with Harley-Davidson, which sees the American motorcycle manufacturer agreeing to pay a $12 million fine for its Screamin Eagle “super tuner” devices.

Also in the agreement, Harley-Davidson agrees to spend $3 million to mitigate air pollution (through a project to replace conventional woodstoves with cleaner-burning stoves in local communities), as well as to stop selling, buy back, or destroy any illegal devices that increase air pollution from the company’s motorcycles. Boom goes the dynamite.

While not quite the Dieselgate scandal that caught Volkswagen circumventing EPA emission standards, Harley-Davidson’s “super tuners” do provide an aftermarket solution for motorcyclists to circumvent the emission devices on their motorcycles.

Compounding the issue though, Harley-Davidson has sold an amazing number of these tuners. Accordingly the EPA and DOJ came down on the Bar & Shield brand like a box of bricks, but the likely costs to take the boxes off the market will make the fines pale in comparison.

All told, Harley-Davidson has sold an estimated 340,000 illegal devices, according to the EPA. Additionally, the EPA says that Harley-Davidson sold more than 12,000 motorcycles that were not covered by an EPA certificate, and thus didn’t meet federal emission standards.

“This settlement immediately stops the sale of illegal aftermarket defeat devices used on public roads that threaten the air we breathe,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Harley-Davidson is taking important steps to buy back the ‘super tuners’ from their dealers and destroy them, while funding projects to mitigate the pollution they caused.”

“Given Harley-Davidson’s prominence in the industry, this is a very significant step toward our goal of stopping the sale of illegal aftermarket defeat devices that cause harmful pollution on our roads and in our communities,” said Assistant Attorney General John C. Cruden, head of the Justice Department’s Environment and Natural Resources Division. “Anyone else who manufactures, sells, or installs these types of illegal products should take heed of Harley-Davidson’s corrective actions and immediately stop violating the law.”

As you can tell by that statement from the DOJ, Harley-Davidson is very much being made an example of in this situation, and perhaps for good reason. For several years now there have been rumors of OEMs building and importing motorcycles in the USA that did not meet certain EPA emission and noise standards.

The settlement today is likely a warning shot that those actions will no longer fly under the radar. You can also consider this settlement a response to the EPA’s retracted proposal to apply on-road emission standards to road vehicles that were used in track or racing events.

What’s not clear from today’s proposed settlement is how much money in total this deal will cost Harley-Davidson. The $12 million fine, and $3 million mitigation costs are clear, but Harley-Davidson is also on the hook for the “super tuner” devices in the marketplace.

Harley-Davidson stock was down 10% at one point after this news, but has since rebounded to close at a 2% loss.

Source: Department of Justice