By on October 17, 2019

Fiat Chrysler Automobiles is facing a $79 million civil penalty over its inability to adhere to fuel economy requirements in 2017. Considering the automaker was already hit with a $77 million fine for 2016 model year requirements, the announcement is not unexpected. FCA’s domestic lineup is also loaded with large vehicles featuring sizable motors, a status quo it hopes to offset by buying carbon credits from Tesla.

In fact, the company appears to be taking a wait-and-see approach in regard to pursuing greener automobiles. While it continues to maintain its $10 billion commitment through 2022, aimed at delivering more hybrid and electric vehicles, the automaker’s established strategy involves eating whatever penalties it incurs via federal economy requirements or attempting to pay them off in advance. 

Frankly, it might be a more cost-effective way to run the company — as it allows the automaker to continue leveraging older models (cough, Dodge). It’s not like people aren’t buying them… though perhaps not in the same numbers FCA originally claimed. The development of electric vehicles also requires quite a bit of cash, with little promise of recouping those funds through sales. Simply paying emission fines could give the company more time to fine-tune its hybrid and electric models while also minimizing the amount of money it has to invest during an uncertain period for the auto industry.

Then again, FCA could be strategizing itself into obsolescence by not pursuing electrification quite so aggressively as some of its rivals. However, plenty of them are also buying emission credits and taking it easier with electrification.

The Department of Transportation’s report came out on Tuesday, noting that Fiat Chrysler had failed to meet the standards set for 2017. While the report has since been taken down (likely temporarily), FCA confirmed it was notified, adding that it has 60 days to respond.

[Image: FCA]

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63 Comments on “FCA Faces $79 Million Fine Over U.S. Fuel Economy Shortfall...”


  • avatar
    ToolGuy

    “Hellcat”

  • avatar
    MoparRocker74

    FCA didn’t ‘fail’ anything. They built and sold the products their customers WANTED. And if you think FCA will dig into their own pockets for one red cent of these BS fines, you’re laughably ignorant. The customer will be paying for this as its built into the cost of every vehicle they sell. So basically it’s a lose-lose situation: build high efficiency greenie mobiles that are guaranteed money losers and no one wants, or pay massive fine ms to the government. And where exactly does that money go? If someone can show me that every dime of MPG fines goes to benefit wounded veterans, orphans or straight to infrastructure investment then ok. But I guarantee it’s earmarked for green technology, and pillaged outright by politicians.

    This should infuriate everyone who sees it regardless of your politics.

    • 0 avatar
      rev0lver

      Well according to Car and Driver, the RAV4 hybrid has sold 29,241 units in the first half of 2019, while the Chrysler 300 has only sold 23,643 up to the end of September (GCBC). The facts don’t really support your point of view.

      • 0 avatar
        ahintofpepperjack

        rev0lver, What has the Rav 4 and the Chrsyler 300 have to do with anything? What are you even talking about? Are you trying to compare one of the best selling crossovers to a soon to be discontinued sedan? Everybody knows crossovers are outselling sedans for everybody. Why don’t you make a fair comparison between two vehicles in a similar segment? The Grand Cherokee has been selling around 20,000 a month for years now.

        • 0 avatar
          rev0lver

          The 300 is an outdated non-green car.

          The Cherokee is one of FCAs more recent models and not a gas guzzler.

          The Durango sold 52,622 units YTD while the RAV4 hybrid has sole 62,881 in the same period (just found the updated stats).

          My point is that fuel efficient vehicles sell, even if Mopar Man doesn’t believe it.

          • 0 avatar
            Vulpine

            The RAV-4 is also notably smaller than the Durango, too. Probably another reason it sells so well. And if the RAV-4 qualifies as a 3-row, I truly pity those forced to sit in that third row.

          • 0 avatar
            SSJeep

            You have to look at like-for-like vehicles to make these comparisons relevant.

            The closest thing Toyota has to the Durango is either the 4Runner with the optional third row, or the Sequoia. And the V6 Durango happens to get much better mileage than both.

      • 0 avatar
        MoparRocker74

        It doesn’t matter how many who sold of what. It matters if they PROFITTED. Rav4 is a commodity, its pretty much a high volume low profit margin cookie cutter transportation pod, it’s what the camry was in toyotas lineup some 15 years ago. It’s selling to the exact same customer. The 300 has inexplicably been ignored by FCA, yet STILL sells in strong numbers relative to its competitors (NOT the rav4). The way the Charger and Challenger are selling/generating profits should tell you something about how FCA is mishandling the 300. It should tell you one HELL of a lot more about my original point which is that no one ‘wants’ eco-mobiles. They only sell to non car people who are simply filling a need for transportation.

        • 0 avatar
          rev0lver

          You do realize that non-car people make up about 95% of the buying public right? They ‘want’ transportation that’s reliable and cheap to run.

          Toyota makes money on green cars and lots and lots of people buy them.

          But enjoy ignoring facts and living in your little bubble. I’m sure you’re used to echo chambers…

          • 0 avatar
            danio3834

            The margin on a Rav 4 hybrid is very low. At a certain point, the cost of selling compliance cars exceeds the cost of the fines.

          • 0 avatar
            MoparRocker74

            Revolver, I do realize that. But do YOU realize that the remaining 5% who ARE car people actually want fun, excitement, and style? How do you justify punitive fines for a person wanting to not follow the crowd? No ones suggesting forcing Karen the Soccer Mom into driving a Hellcat or a Gladiator. But the gub-mint IS actively trying to either heavily penalize or remove entirely that choice for those who want it. THATS a huge problem for me.

          • 0 avatar
            Jon

            Mr. Gun,

            95% huh? If that were true, then 95% of the vehicles on the road would be “reliable and cheap”. On the roads i frequent, a lot less than 95% of the vehicles are “reliable and cheap”.

            I think a lot more than 5% of people enjoy driving their car enough to want more than just “reliable and cheap” out of their vehicle.

            I think a lot of folks are starting to wake up to the effects of over-regulation. I just hope enough wake up before the next ruling generation is entertained into compliance.

        • 0 avatar
          Lorenzo

          I agree the 300 is being mishandled. It’s more of a luxury car than any Alfa ever will be, and should have had updates at regular intervals.

          A New Yorker spinoff with a bigger trunk and some interior COLOR would have sold in small, higher margin numbers, while making better use of the paid-for platform.

          A V6 powered lower priced Newport for a third model would have allowed the 300 to be the performance luxury car it’s supposed to be.

          • 0 avatar
            Vulpine

            @Lorenzo: Alfa was never meant to be a luxury brand; it’s pure sports. If you’re looking for luxury then you go to Maserati, instead.

          • 0 avatar
            28-Cars-Later

            Seems the issue is/was the Italians had just as many superfluous brands (Alfa/Lancia/Maserati) as Chryco did. Should have binned two of them and made Chrysler the near-lux marque with the survivor marque (my pick: Maserati) as luxury.

        • 0 avatar
          Scoutdude

          The RAV4 is not a low margin vehicle, sure it may not have the margin of a hellcat, but it is better than the cars in Toyota’s line up when comparing similar trim levels, though I’m betting the average RAV-4 sale has a higher content/trim level than the average Corolla or Camry.

      • 0 avatar
        MrIcky

        @rev0lver …and they sold 299480 Ram pick ups in the first half of 2019. And 116985 Jeeps. Neither being economy standouts. So your Rav4 example is not a good one.

      • 0 avatar
        28-Cars-Later

        Two different models, one of which was just refreshed. Want to compare Model X to Corvette sales and tell me nobody wants a V8 anymore?

    • 0 avatar
      Fred

      Agreed, so now all they have to do is apply that 70 mill to the prices of those cars and trucks and everything will be alright. Well until sales fall off because of the price.

      • 0 avatar
        MoparRocker74

        Fred, they already do that. The ‘gas guzzler’ tax applied to the Scat Pack and above hasnt broken the deal on ONE car. It’s just a money grab designed to redistribute a little cash into politicians’ pockets. Anyone who’s been lusting after a Hellcat and can afford it is NOT gonna pull the plug because of a MPG fine and go settle for a Hybrid rav4. If you believe that, I have a bridge to sell you.

  • avatar
    28-Cars-Later

    Smart.

  • avatar
    Mnemic

    Why would they bother blowing money on EV’s and EV tech when everyone else already is? Those vehicles will boil down to skateboard chassis filled with battieries with plug-in computer tech from other suppliers. What exactly is FCA supposed to develop? I’d be “developing” how to reproduce classic Mopar bodies to be placed over these autonomous electric skateboard chassis as that’s where their money will be coming from in the future. Give me the 69 charger r/t body with the delux lazyboy interior and 4K TV please and let me check off the box so I can come back to the dealer in the fall and have the body replaced with a SUV body for the winter.

    • 0 avatar
      TMA1

      Classic Mopar bodies are already happening:

      https://dynacornbodies.com/body-shells/challenger/

      They haven’t gotten to the Charger yet though.

    • 0 avatar
      Lorenzo

      I’ve driven a 1969 Charger, when it was new. Putting a ’69 Charger body on an electric car chassis is sacrilege. RWD chassis with a 2019 hemi or no deal.

      • 0 avatar
        Vulpine

        Out of the roughly 5000 Charger Daytonas that hit the road back in ’69, how many survived their first week?

        • 0 avatar
          ToddAtlasF1

          There were only 505 1969 Charger Daytonas sold, but 5,000 of them have survived.

          • 0 avatar
            Vulpine

            You have verifiable proof? Because I know of many Daytonas and SuperBirds where I used to live that never survived their first week on the road. (I lived those days.) Having a freeway nearby and traffic being relatively light back then, buyers would often show off to their friends, at which point they’d discover just how bad the model’s handling really was when they had to make an emergency maneuver or simply try to take an exit ramp while traveling too fast. Just in that one region, it seemed no weekend for that year or so went by without either a ‘Bird or a Daytona in a spectacular crash from which a survivor was a surprise rather than expected.

            Personally, I think your numbers are exactly reversed to where only 500 of each survived.

  • avatar
    PrincipalDan

    Makes me think of the old CAFE days when companies like Ford would try to hurry up and sell a bunch of Escorts right before the reporting period ended so they could avoid the fines.

    E-Torque all the things? ;-)

  • avatar
    MartyToo

    Quote:”In fact, the company appears to be taking a wait-and-see approach in regard to pursuing greener automobiles.”

    They are waiting to see if FCA exists in another five years before hitting the bankers up for a loan to buy batteries, etc.

  • avatar
    Detroit-X

    FCA is taking the smart approach to electric cars. It’s not hard to do if you have eyes and see the LACK OF DEMAND, the LACK OF INFRASTRUCTURE. If I wanted an electric vehicle I’d buy a golf cart. $80 Million fine? That’s nothing.

    • 0 avatar
      MoparRocker74

      THIS. More importantly, even if electric cars become mainstream, there will ALWAYS be customers who want nothing to do with joining the hive mentality. That’s what Hemi everything, loud colors, brash styling and pushback against the bland is carving out a deep niche for FCA.

    • 0 avatar
      Vulpine

      Chrysler used to be the leader in coming up with new technologies… even if they failed due to releasing them for sales before they were fully tested. Now, it seems, they wait for everyone else to pay for the development before they come up with their answer. Sometimes that works, other times it doesn’t. If FCA waits too long, they may end up losing out entirely.

      But if they time it right–maybe by doing their research behind closed doors and using conventional-looking ‘mules’–they may end up bringing out something that still properly looks like a Jeep or a RAM or whatever while offering surprisingly silent capability and performance. That engine you hear might be attached to a dummy load while electric motors and batteries are doing all the work.

  • avatar
    Jon

    Some of these larger manufacturers need to get together and co-develop an “eco car”. Share the cost to develop, manufacture and distribute a cheap high MPG car whose only purpose is to boost their ability to meet fuel economy regulations.

    • 0 avatar
      TMA1

      Sergio lives!

      Honda/Toyota own the small eco car market. The other companies were smart to get out, since they squandered their reputations in that segment decades ago. Really, we just need the government to stop punishing companies for not being successful in certain segments.

    • 0 avatar
      MoparRocker74

      I’ve been saying this for years. CUVs and midsized sedans are pretty much homogeneous anyway. Co-develop one of each, share as many components as possible, maybe use proprietary engines, and grilles tgen crank em out cheap and deep for the masses. Put your ‘real’ eggs into the basket of fun stuff like musclecars and 4x4s.

  • avatar
    DenverMike

    Not ironically, the worst offenders net FCA the biggest (obscene) margins. It’s a non issue and FCA is still laughing all the way to the bank.

    The fines aren’t designed to curb behavior, they’re a cash grab, shakedown, profit sharing.

    • 0 avatar
      MoparRocker74

      There’s truth to that. And I think some of it is the‘forbidden fruit effect’. I mean, what did Prohibition do for the sales of illegal booze? If I were running the marketing show at FCA, I would blatantly brag about how ‘The Man’ is trying to crush your quest for fun and affordable performance, tap into the outlaw spirit. Push back against subaru, Toyota, etc with their sappy dorky eco friendliness. The desire to thumb our noses at the nanny state and do-gooderism is a VERY real driver for why musclecars have never fully vanished in the first place.

    • 0 avatar
      thelaine

      Exactly. These fuel economy standards should be abolished.

      • 0 avatar
        Vulpine

        … and when there’s no more fuel? What then?

        • 0 avatar
          FreedMike

          That’s like asking what happens when you run out of french fries and Big Macs to eat – you aren’t.

          etter question: what do you do when you figure out that crap’s no good for you? Answer: you change what you eat. It’s not easy. The people around you who still eat that stuff all the time might even look at you like you’re silly for doing something different. Change is hard.

          Same’s true of the fuels we use now. There’s plenty of it, and it’s not going away…and it’s no good for us to use in the volumes we use it in now, much less the volumes that are going to be used very soon. People know that – they’re just resistant to change.

          But saying “we’re running out” is alarmist, and probably counterproductive if the goal is to change things.

          • 0 avatar
            ajla

            “probably counterproductive if the goal is to change things.”

            So is CAFE.

          • 0 avatar
            MoparRocker74

            ‘Resistant to change’? NO. Resistance to being forced to downgrade and pay more for it…YES. Whenever someone is touting ‘change’ with no direction or a good argument for why it benefits me is a guaranteed recipe for LOTS of resistance. Paying far out the @ss for sterile, boring, ugly electric and high efficiency garbage is ‘change’ I’ll resist until the bitter end. But ‘change’ in terms of a biofuel that is cheaper to buy and yields more mpgs than petroleum based fuels while preserving or increasing power output and not shortening the life of an ICE engine…ok let’s talk. Going from carburetion to fuel injection is ‘change’ also but it’s proven to offer plenty of advantages with few if any drawbacks. And that’s what I really want: improvements without any serious sacrifices. If you can’t offer that, then get away from me.

          • 0 avatar
            FreedMike

            Sheesh…some folks self-victimize so much I fear they’ll hurt themselves.

            You ain’t forced to do s**t, friend – if you don’t like electric cars, don’t buy them. Easy as that. No one’s putting a gun to your head. No one’s saying you won’t be able to buy a conventionally powered car for a LONG time – you will.

            But there’s nothing wrong with choice. And there’s nothing wrong with choosing something that runs on a different fuel than you like. There’s nothing wrong with making energy new ways that pollute less.

            And there’s nothing wrong with people making different choices than you do. If you can’t handle that, then as you say, “get away from me” is the outcome – they’ll get away from you. People don’t like being disrespected. You do it all the time around here. And it’s tiresome to watch.

          • 0 avatar
            ToddAtlasF1

            There is nothing wrong with people choosing to offer products they see an opportunity to make money on and people choosing to buy those products if they find them appealing. EVs are the work of pure command economy fascism. You can dissemble all you want, but you are espousing true evil.

  • avatar
    dal20402

    High-risk, high-reward strategy for FCA.

    With the current see-no-evil administration in office, it’s a small price to pay for selling only in the market’s most profitable segments, at least in the US. (FCA’s strategy in all other markets is in shambles in any event.)

    If there is a future administration that puts some muscle into improving battery tech and reducing CO2 emissions, FCA is going to be up a creek without a paddle.

  • avatar
    Hummer

    Spend $1Billion to develop a ground up design EV with minimal sales. Spend some money to update a good selling platform that’s paid for, big returns, pay the government their BS fee and come out ahead. FCA has it figured out.

    • 0 avatar
      TMA1

      I agree, but the target is always moving. Once it can no longer be tracked with those LX cars, they’re toast. Same thing happened to the Panther. But FCA makes its money with Jeeps and trucks anyway, and those targets are designed to be easier to hit.

  • avatar
    Lou_BC

    FCA… The HD (Harley Davidson) of the automotive industry. Keep making vehicles that only boomers want! That is a sound long term business model./sarc

  • avatar
    Fliggin_De_Fluge

    I spose this is one of the times where a fuel economy “scandal” is a good thing. Lets face it, this is good publicity for FCA, who will sell more now, kinda flipping the bird to the Gov. I can see a slap back coming, perhaps more fines to put them in their place. We cant have people doing what they want to do, oh no, that would be against their rules.

  • avatar
    tylanner

    FCA doesn’t engineer or develop automobiles….they slap metal and plastic of various sizes together….innovation to them is bending sheet metal and slapping on a different badge like a “new” NASCAR cup car…

    This is the Ford problem all over again….doing things how we’ve always done them is our disease…but they are free to ride their profits straight into insolvency…

  • avatar
    Lorenzo

    FCA may have found the sweet spot by not spending billions on electric cars. I’m sure owners are rethinking the utility of them in California, where blackouts may now become a regular occurrence.

    I live in Southern California, and have all-electric, with a total bill that adds up to 26 cents/kWh, and the local electric company is warning that rates will have to go up to 30 cents to pay for more renewables.

    At that price electric cars make sense only because California taxes and regulations have raised gasoline prices to the $4.50-$5.00 per gallon level. That’s apparently the strategy for electric car sales – make ALL energy more expensive.

    • 0 avatar
      Flipper35

      They have done a lot of research on electric and hybrid electric.

      https://www.allpar.com/cars/concepts/electric.html

      How the hybrid Jeep never made it to production is odd. 400 miles on 8 gallons of fuel in a Wrangler?

  • avatar
    HotPotato

    I see the trolls who love to identify with the world’s worst people and companies have latched on to FCA. It’s laughable because there’s no strategy or politics to this situation. Chrysler is exactly the same company it has always been, generation after generation: the also-ran of the Detroit Three, milking obsolete platforms for the last penny, balancing its reputation for cheap interiors and poor reliability with a knack for carving out a niche with fun colors and cheap horsepower, often having good ideas but rarely having the money to develop them properly (behold the brilliant but unreliable Pacifica Hybrid, with its habit of becoming engulfed in flames), and somehow managing to come back from the brink every time through pluck or luck (K-cars, the SUV craze). No strategy here other than making it to next quarter in one piece, long term be damned.

  • avatar
    kosmo

    This is simply a $79 million tax.


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