Following extensive negotiations, Fiat Chrysler Automobiles has reached a settlement with the Department of Justice, the Environmental Protection Agency, the State of California and an assortment of other entities over its “noncompliant diesel vehicles.”
According to the US government, FCA used “illegal and undisclosed software” on 2014-2016 Ram 1500 and Jeep Grand Cherokee vehicles equipped with the 3.0-liter EcoDiesel V6 engine. The government says the software acted as a defeat device as it would fully activate emission controls during EPA and California emissions testing, but “reduce or deactivate emission controls” during real world driving. As a result, these models emitted air pollutants – including nitrogen oxide – at a much higher rates than allowed.
Under the terms of the settlement, FCA will recall and repair more than 100,000 diesel-powered vehicles in the United States. The company will also pay a $305 (£239 / €265) million civil penalty and “implement a program to mitigate excess pollution from these vehicles.”
The recall and federal mitigation programs are estimated to cost up to $185 (£145 / €160) million, while FCA will fork over another $19 (£14.9 / €16.5) million to mitigate excess emissions from vehicles in California. The company will also pay $6 (£4.7 / €5.2) million to “resolve allegations of illegally importing 1,700 noncompliant vehicles.”
FCA estimates the total cost to resolve the issue will be $800 (£627 / €695) million and said the “settlements do not change the company’s position that it did not engage in any deliberate scheme to install defeat devices to cheat emissions tests.”
As part of the recall, FCA will update emission control software on the offending vehicles and provide them with an extended warranty. The company says the update won’t have any effect on “average fuel economy, drivability, durability or refinement.”
FCA also settled a class action lawsuit over the diesel issue and this means current and former owners will be eligible to receive a payment of approximately $2,800 (£2,195 / €2,434).
While the fines and penalties are significantly less than those faced by Volkswagen, the settlements don’t clear FCA of potential criminal liability. The company will also face “stiff penalties” if it doesn’t repair at least 85% of the vehicles within two years.
In a statement, acting EPA Administrator Andrew Wheeler said “Fiat Chrysler deceived consumers and the federal government by installing defeat devices on these vehicles that undermined important clean air protections.” He went on to say, “Today’s settlement sends a clear and strong signal to manufacturers and consumers that EPA will vigorously enforce the nation’s laws designed to protect the environment and public health.”
