Fiat Chrysler Automobiles NV facing $840M DoJ probe in excess diesel emissions

In a significant development, Fiat Chrysler Automobiles NV stated, it could potentially face costs up to $840 million (722 million euros) to resolve a Justice Department investigation into excess diesel emissions.

In a statement FCA said, the impact of a U.S. appeals court ruling earlier this year in August, which overturned the Trump administration’s July 2019 rule that had suspended a National Highway Traffic Safety Administration (NHTSA) regulation which had more than doubled penalties for automakers failing to meet fuel efficiency requirements, could be significant.

In a securities filing FCA said, the amounts “accrued could be up to $581 million (500 million euros) depending on, among other things, our ability to implement future product actions or other actions to modify the utilization of credits.”

The automaker declined comment.

Last year in October 2019, the carmaker had said, it had incurred a $79 million U.S. civil penalty for failing to meet 2017 fuel economy standards and had to shell out $77.3 million for 2016 requirements.

In its securities filing the FCA stated, it remains to be determined if “NHTSA will appeal the ruling” and it is unclear if the ruling will be applied retrospectively to its 2019 model year.

In the event a higher rate was to be applied, FCA “may need to accrue additional amounts due to increased CAFE penalties and additional amounts owed under certain agreements for the purchase of regulatory emissions credits.”

Separately, FCA also recognized a $258 million (222 million euro) provision “to settle matters under investigation by the U.S. Department of Justice primarily related to criminal investigations associated with U.S. diesel emissions matters.”

Earlier in January 2019, FCA had agreed to an $800 million settlement to resolve U.S. Justice Department claims and California Air Resources Board claims that it had used illegal software which produced artificial results on diesel-emissions tests.

In a statement, FCA said its settlement talks with the DoJ are ongoing and it is not certain if it will result in an agreement.

In September, the carmaker had said, it had agreed to pay $9.5 million to settle allegations that it had misled investors over its compliance with emissions regulations.



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