Fiat Chrysler Automobiles (FCA) isn’t admitting it might have cheated on emissions tests for its model year 2014 to 2016 Dodge Ram 1500 pickup trucks and Jeep Grand Cherokees, both equipped with 3.0-liter diesel engines, but it has agreed to pay an aggregate $800 million to consumers for errors in its software, which reduced the amount of nitrogen oxide emitted during emissions tests.
Because of this software glitch, the vehicles spew more of the nitrogen oxide pollutant than is permitted under the Clean Air Act. This Fiat Chrysler case dates back to the last days of the Obama administration. In very early 2017, the EPA accused the company of installing software that enabled these trucks to emit far more pollutants than allowed.
Under terms of the settlement, Fiat Chrysler is proceeding with a recall program to repair more than 100,000 out-of-compliance vehicles. It will offer an extended warranty on those trucks and SUVs and pay a civil penalty of $305 million to settle claims of “cheating on emission tests and failing to disclose unlawful defeat devices,” the Department of Justice (DOJ) filing stated.
Fiat Chrysler also agreed to pay certain vehicle owners between $990 and $3,075 out of pocket to settle class-action claims, an amount that could reach more than $300 million. “The Department of Justice is committed to the full and fair enforcement of the laws that protect our nation’s environment,” said Jesse Panuccio, principal deputy associate attorney general in announcing the agreement.
This settlement between the DOJ and FCA pales by comparison to the $15 billion-plus penalties incurred by Volkswagen in 2016 that resolved its very public diesel emissions cheating scandal. VW admitted to programming millions of vehicles so that they would activate emissions controls only during laboratory testing. VW was required to buy back cars from customers and invest in American clean energy technologies.
The agreement between the Department of Justice and Fiat Chrysler stems from a May 2017 DOJ filing of a civil complaint that alleged FCA installed software designed to cheat emission controls in its popular diesel-powered trucks and SUVs. This complaint stated software functions weren’t disclosed to regulators during certification processes; the DOJ said these vehicles contained defeat devices.
After the VW debacle, the Environmental Protection Agency expanded its vehicle testing to look for so-called defeat devices on diesel engines. With the publication of this settlement, the cost to FCA could be more than monetary. Like VW, it could find it negatively impacts the company’s reputation with consumers, which would effect the bottom line.