Fiat Chrysler is about to be sued over diesel emissions say insiders

May 18, 2017

Fiat Chrysler Automobiles hasn't exactly been ahead of the curve on developing electric cars. Nor has it done much work on self-driving vehicles (though its partnership with Waymo has picked up some of the slack). 

But when it comes to predicting lawsuits, FCA is batting 1000.

Back in March, FCA's CEO, Sergio Marchionne, warned investors that the company could soon face a Volkswagen-esque Dieselgate crisis of its own. Lo and behold, insiders now report that the U.S. Department of Justice is preparing to file suit against FCA if the automaker fails to resolve its differences with federal regulators over diesel emissions. 

FCA's troubles began last November, when U.S. owners of Ram diesel pickups from model years 2007 to 2014 filed suit, claiming that their trucks were equipped with defeat devices like the ones found on more than 11 million Volkswagen vehicles. A second, similar suit was filed in December.

The following month, the U.S. Environmental Protection Agency came for FCA, insisting that the company had installed such devices on Jeep Grand Cherokee diesels, too. The EPA said that the software on those 104,000 pickups and SUVs appeared to generate different emissions levels when a vehicle was being tested compared to when it was on the road.

FCA has repeatedly denied any wrongdoing, insisting that the software on its diesels doesn't constitute a defeat device. However, the company has yet to explain the software's function to the EPA's satisfaction.

And even if it does, FCA may still have to pay federal fines. The EPA says that FCA's failure to disclose the presence of the questionable code was itself a violation of the U.S. Clean Air Act, no matter the software's intent.

If FCA and regulators don't reach some middle ground soon, the automaker could find itself at the center of a federal lawsuit--potentially by tomorrow. If the situations escalates and if the DOJ successfully makes its case, the automaker could face fines of up to $44,539 per vehicle, or up to $4.6 billion in total.

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