E.P.A. Accuses Fiat Chrysler of Secretly Violating Emissions Standards

E.P.A. Accuses Fiat Chrysler of Secretly Violating Emissions Standards

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Her description of the software showed great similarities with Volkswagen’s defeat device, designed so that during emissions tests, the cars met legal standards. But E.P.A. investigations showed that under normal driving conditions, the software reduced the effectiveness of emissions controls.

Sergio Marchionne, chief executive of Fiat Chrysler Automobiles, mounted an impassioned defense, denying that his company had intentionally broken the law.

“There’s not a guy” at the automaker “who would try something as stupid” as cheating on emissions tests, he said on a call with reporters.

“We don’t belong to a class of criminals,” Mr. Marchionne said. “Our sin, if we did commit one, is the most benign in nature.”

Affected models include the light-duty model year 2014, 2015 and 2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3-liter diesel engines sold in the United States, the agency said. About 104,000 vehicles are fitted with the software in question, it said.

Fiat Chrysler has been notified that the cars violate the Clean Air Act, the agency said. To date, the automaker has not given E.P.A. or the California Air Resources Board, which jointly investigated the vehicles, a satisfactory answer on the accusations, Ms. Giles said.

Fiat Chrysler said it “believes that its emission control systems meet the applicable requirements.”

The company said it had spent months providing “voluminous information” in response to questions from American regulators and had proposed remedies to address their concerns, including extensive software changes to emissions control systems that the automaker said could be made in vehicles “immediately.”

The company added that it intended “to work with the incoming administration to present its case and resolve this matter fairly and equitably” and to assure the agency and customers that it met regulatory requirements.

The discovery of Volkswagen’s cheating in its vehicles, 600,000 of which were sold in the United States, set off numerous investigations.

On Wednesday, federal prosecutors announced criminal charges against six Volkswagen executives for their roles in the emissions manipulation. Volkswagen also formally pleaded guilty to charges of conspiracy to commit wire fraud and to violating the Clean Air Act, customs violations and obstruction of justice.

The financial cost to Volkswagen has been hefty. The German automaker is set to pay $4.3 billion in criminal and civil penalties in connection with the federal investigation, bringing the total cost of the deception to Volkswagen in the United States, including settlements of suits by car owners, to $20 billion — one of the costliest corporate scandals in history.

The scandal has also led American regulators to test a wide range of vehicles for compliance with federal emissions standards. Ms. Giles declined to identify which automakers’ cars were being investigated but said investigations were continuing.

Stock in Fiat Chrysler tumbled after E.P.A.’s announcement, falling more than 15 percent before heavy volumes forced the New York Stock Exchange to suspend trading.

The accusations come at a difficult time for Fiat Chrysler. Until recently, Fiat Chrysler enjoyed rapidly rising sales in the American market, outpacing rivals like Ford and General Motors. Americans’ increasing interest in trucks and sport utility vehicles drove brisk sales of Jeeps and Ram pickups, even as Fiat Chrysler’s car sales languished.

But last year a lawsuit accused the company of inflating sales figures, and it came under investigation by the Securities and Exchange Commission. The investigation has not yet been completed. After news of the inquiry, Fiat Chrysler’s sales slowed. Last year, the company sold 2.24 million cars and light trucks, a decline of 0.4 percent from 2015.

European manufacturers have been trying for years to build a following in the United States for diesel-powered cars. In addition to VW and Audi, Mercedes-Benz, BMW, Jaguar and Land Rover all offer luxury models with diesel engines, although they make up a small fraction of their total sales.

Diesel models are a modest portion of the Ram pickup trucks sold by Fiat Chrysler. In 2016, it sold 489,418 Ram trucks, and 55,209, or 11 percent, were equipped with diesel engines, according to data compiled by Hybridcars.com. That was enough to make it the top-selling diesel light vehicle in the country, just ahead of the 50,137 diesel Transit vans sold by Ford.

All other diesel vehicles had much lower sales. The third-best-selling model was the diesel version of the Chevrolet Colorado pickup. General Motors sold 8,596 of them last year. Fiat Chrysler also sold 4,253 diesel-powered Jeep Grand Cherokees and 397 diesel ProMaster vans. G.M. has a diesel option for its Chevy Cruze compact, but it sold just 256 last year.

Ford and G.M. both have plans to offer the technology in additional models. At the Detroit auto show, Ford said, it will add a V8 diesel option in its F-150 pickup truck starting next year. Later this year, G.M. will begin selling the 2018 Chevrolet Equinox with a 1.6-liter diesel engine as an option.

Environmental advocates used the accusations against Chrysler to highlight the role of the E.P.A. and to issue warnings about President-elect Donald J. Trump’s expected plans to reduce the agency’s scope and authority.

“It’s very important that they’re doing this now,” said Frank O’Donnell, the president of Clean Air Watch, a Washington advocacy group. “They’ve got polluter lobbyists massing at the gate of both Congress and the White House. This case underscores the importance of keeping a federal environmental cop on the beat at E.P.A.”

Mr. Trump has vowed to “take a tremendous amount out” of the E.P.A. His nominee to head the agency, Scott Pruitt, the attorney general of Oklahoma, has led a legal charge to dismantle many of the agency’s signature clean air regulations, and he has pushed to diminish federal oversight of the environment, sending authority from Washington to the states.

Graphic

How Volkswagen Has Grappled With Its Diesel Scandal

Volkswagen has admitted that 11 million of its vehicles were equipped with software that was used to cheat on emissions tests. The company is now contending with the fallout.



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