Share of Fiat Chrysler began to tumbler earlier Tuesday as Reuters reports the U.S. government has filed a civil lawsuit against Fiat Chrysler Automobiles (FCA) over allegations the company’s 3.0-liter diesel V-6 violated the Clean Air Act (CAA). The suit involves over 104,000 FCA vehicles.
The suit filed by the U.S. Justice Department is a procedural step against FCA. It could ultimately apply pressure to FCA to generate a settlement, similar to that of Volkswagen AG, which has paid over $25 billion for its settlement regarding excessive diesel emissions.
In January the U.S. Environmental Protection Agency (EPA) and California Air Resources Board (CARB) issued a notice of violation to FCA regarding the 3.0-liter diesel. The notice of violation alleges that FCA had auxiliary software on its emission system that cheated emission testing. The CAA requires automakers to disclose all auxiliary controls on emission systems during their certification process, FCA did not disclose the software to regulators.
Despite the lack of disclosure, FCA contends the software is not intended to cheat emissions testing; a contrast to Volkswagen AG’s diesel scandal from 2015. Volkswagen also admitted to their wrongdoing, whereas FCA continues to deny any wrongdoing.
The lawsuit filed today accuses FCA of placing undisclosed defeat devices on the emission system of 2014-16 Ram 1500 and Jeep Grand Cherokee models equipped with the 3.0-liter diesel engine. The maximum fine FCA could face is $4.6 billion, according to EPA reports from January.
Update: FCA has issued the following statement regarding the filing of the DOJ lawsuit:
FCA US has been working with the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) for many months, including extensive testing of the vehicles, to clarify issues related to the Company’s emissions control technology in model-year (MY) 2014-2016 Jeep® Grand Cherokee and Ram 1500 diesel vehicles.
FCA US is currently reviewing the complaint, but is disappointed that the DOJ-ENRD has chosen to file this lawsuit. The Company intends to defend itself vigorously, particularly against any claims that the Company engaged in any deliberate scheme to install defeat devices to cheat U.S. emissions tests.
As FCA US announced last week, it has developed updated emissions software calibrations that it believes address the concerns of EPA and CARB, and has now formally filed for diesel vehicle emissions certification with the regulators for its 2017 model year (MY) Jeep Grand Cherokee and Ram 1500 diesel vehicles. Subject to the permission of EPA and CARB, FCA US intends to install the same modified emissions software in 2014-2016 MY Jeep Grand Cherokee and Ram 1500 diesel vehicles. FCA US believes this will address the agencies’ concerns regarding the emissions software calibrations in those vehicles.
FCA expects that the installation of these updated software calibrations will improve the 2014-2016 MY vehicles’ emissions performance and does not anticipate any impact on performance or fuel efficiency.
Notwithstanding this lawsuit, the Company remains committed to working cooperatively with EPA and CARB to resolve the agencies’ concerns quickly and amicably.