Carmakers face huge fines for producing inefficient cars.
According to Reuters, Fiat Chrysler Automobiles paid $77 million in US civil penalties at the end of last year because it failed to meet 2016 model year fuel economy requirements. Take a wild guess as to why. Still guessing? The reason is pretty obvious: too many powerful V8-engined models, such as the Dodge Charger and Challenger. It was in 2015 when FCA unveiled its wonderfully ridiculous 6.2-liter supercharged Hellcat V8 with 707 hp and 650 lb-ft of torque and then stuffed it under the hood of the Charger and Challenger.
A couple of years later, the Jeep Grand Cherokee became the third recipient. It’s not only the Hellcat V8, mind you. There’s also the 5.7- and 6.4-liter Hemi V8s powering lower trim Chargers and Challengers. FCA was also a bit late to get into the hybrid market and it counted on the Fiat 500e to help meet CAFE standards.
Not at all surprisingly, the automaker today is lobbying the Trump administration to revise fuel economy requirements. A company spokesperson said the current fuel economy requirements should be reformed instead of "requiring companies to make large compliance payments because assumptions made in 2011 turned out to be wrong.”
What FCA, and likely other automakers as well, is for regulators to freeze fuel economy requirements starting for the 2020 model year that will remain in place through 2026. FCA, however, still remains "committed to improving fuel efficiency of our fleet and expanding our US manufacturing footprint.” What’s also interesting about FCA’s $77 million penalty is the amount itself. For example, the civil penalty in 2014 was just $2.3 million. In 2011 it was $40 million.
Obviously, those penalties are the result of the previous administration’s policies, hence FCA’s lobbying of the current administration to reverse course. In the past, FCA bought emissions credits from Tesla, Toyota, and Honda, but that’s not the best strategy going forward.
Aside from its V8 lineup, another reason for FCA’s regulatory troubles stems from the fact that some "front-wheel-drive utility vehicles previously classified as trucks were moved to the car fleet, which have much tougher fuel-efficiency requirements.” In any case, unless the Trump administration makes the regulatory changes FCA and others want, expensive penalties could continue.