Environmental regulators accused automaker Fiat Chrysler of installing software on 100,000 diesel-powered cars and trucks that they say is cheating on emissions tests.
The accusation by the U.S. Environmental Protection Agency and the California Air Resources Board (CARB) is similar to the scandal that has plagued automaker Volkswagen for more than a year.
Just this week, Volkswagen agreed to pay $4.3 billion to settle charges that it cheated on diesel emissions tests with more than 590,000 diesel-powered U.S. cars. The Justice Department also indicted six Volkswagen executives on Wednesday.
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"This is a clear and serious violation of the Clean Air Act," said Cynthia Giles, assistant administrator for EPA. "When companies break the law, Americans depend on the EPA to step in and enforce."
"Once again, a major automaker made the business decision to skirt the rules and got caught," said CARB Chair Mary Nichols. "CARB and U.S. EPA made a commitment to enhanced testing as the Volkswagen case developed, and this is a result of that collaboration."
The vehicles cited include 2014, 2015 and 2016 model year Jeep Grand Cherokees SUVs and and Dodge Ram 1500 trucks with 3-liter diesel engines.
Fiat Chrysler said it believes its emission control systems meet the applicable regulations.
It said the software on its engines is an allowable way to meet emissions rules. The company said it is not there to cheat on emissions tests, but rather to protect the engine from damage.
But the EPA said that since the software had not be disclosed to the EPA, that puts Fiat Chrysler is in violation of the Clean Air Act, even if it wasn't seeking to cheat on emissions tests.
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Fiat Chrysler said it has proposed a number of steps that could be taken to address EPA's concerns. Unlike Volkswagen, which admitted the deception and apologized for it soon after it was cited by EPA and CARB, Fiat Chrysler indicated it will continue to fight the allegation once President-elect Trump takes office.
"FCA intends to work with the incoming administration to present its case and resolve this matter fairly and equitably and to assure the EPA and FCA customers that the company's diesel-powered vehicles meet all applicable regulatory requirements," it said.
Still Fiat Chrysler (FCAU) shares were down 10% on the news.
Regulators said that the Fiat Chrysler vehicles emitted much more than the allowable level of the pollutant nitrous oxide when they were driving on the road than they did when they were stopped to have their emissions tested. These were the same issues in the Volkswagen case.
The problem was discovered with new testing that better measures real-world emissions. The new tests were implemented in the wake of the VW scandal.
Fiat Chrysler may not be the last automaker charged under these enhanced tests. The EPA said it is still investigating diesel vehicles made by other automakers, but declined to name them.
"Most vehicles pass these tests," said Giles. "It is by no means impossible to make a clean diesel passenger vehicle that meets these standards."
