Lawsuit

US Sues FCA For Cheating Diesel Engines, Seeks $4.6 Billion In Fines

Unlike Volkswagen, FCA doesn’t have huge cash reserves to blow on appeasing US regulators.

It’s finally happened, the thing that US regulators kept telling Fiat Chrysler would happen if both parties couldn’t come to an agreement over allegations that the Italian-American automaker was installing cheat software on diesel models sold in the US: FCA has been sued by the US Department of Justice in the U.S. District court in Detroit. The specific grounds?That over 104,000 diesel Jeep Grand Cherokees and Dodge Ram 1500 trucks built between 2014 and 2016 have cheat software, reports Reuters.

In stark contrast to what Volkswagen did when it had its fun diesel conversation with the EPA, FCA is denying the allegations and has said it would fight any lawsuit with an army of lawyers. The fight is over what is known as an auxiliary emissions device, essentially lines of code that allow a car's computer to suspend emissions control devices when operating outside of normal parameters in order to preserve engine reliability. The EPA allows automakers to use these devices as long as it discloses them and proves that they are only in place to benefit engine longevity. FCA didn’t do that and is now facing scrutiny from regulators who are angry about that and believe it was done intentionally to fool the EPA.

The US DOJ is specifically calling out FCA’s VM Motori wing, which designed the diesel engines that are the subject of investigation. It claims to have emails and other documents from the company that cover the engine’s technical aspects and will use these as evidence that FCA is cheating. If the company is caught, it could face fines as high as $44,539 per vehicle, totaling $4.6 billion. Compared to the $25 billion Volkswagen had to spend in the US to remedy the issue, this is chump change. However, it’s worth noting that Volkswagen is the world’s largest automaker and can absorb that sort of financial impact better than FCA, which was still saddled with $5.1 billion of debt at the end of 2016.

The investigator’s findings reflect an increase in scrutiny after Dieselgate, and the increasing difficulty surrounding the design and build process of compliant diesel engines has led many automakers to back off of selling oil burners to the US entirely. It’s too early to tell how this will affect FCA given that the court battle has just commenced, but we hope two things happen. One, that FCA and other automakers stop the culture of cheating (that is if FCA is actually doing so) and two, that our favorite Fiat Chrysler vehicles remain untouched by the fallout if the outcome lands in favor of the regulators.

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