FCA Could Face $840 Million in New U.S. Regulatory Fees
Fiat Chrysler Automobiles has said that it might be looking at $840 million if it wants to settle a Justice Department investigation into excess diesel emissions and threw some mild shade at regulators.
The manufacturer noted that the U.S. appeals court’s August ruling that overturned the Trump administration’s July 2019 rule that suspended a National Highway Traffic Safety Administration regulation more than doubling emissions penalties for automakers is playing a major factor in that sum. Obviously, it wishes they hadn’t.
In 2019, FCA agreed to an $800 million settlement to resolve claims from the Justice Department, California Air Resources Board (CARB), and customers over the use of illicit software that falsified testing information on diesels. This was in conjunction with other emission-related fines and came off several years of having to pay tens-of-millions in civil penalties for failing to adhere to U.S. fuel economy requirements. While some of this has been offset via the purchasing of carbon credits in both the United States and Europe, it still represents a financial setback for FCA.
According to Reuters, FCA would like the August ruling that’s poised to jack up its current diesel emission penance appealed. Otherwise, it “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.”
From Reuters:
FCA in a securities filing said the amounts “accrued could be up to 500 million euros ($581 million) depending on, among other things, our ability to implement future product actions or other actions to modify the utilization of credits.”
The automaker declined to comment Monday.
In October 2019, FCA said it incurred a $79 million U.S. civil penalty for failing to meet 2017 fuel economy requirements after paying $77.3 million for 2016 requirements.
FCA’s filing said it is uncertain if “NHTSA will appeal the ruling” and unclear if the ruling will be applied retroactively to the 2019 model year.
[Image: FCA]
Consumer advocate tracking industry trends and regulations. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied, he pivoted to writing about cars. Since then, he has become an ardent supporter of the right-to-repair movement, been interviewed about the automotive sector by national broadcasts, participated in a few amateur rallying events, and driven more rental cars than anyone ever should. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and learned to drive by twelve. A contrarian, Matt claims to prefer understeer and motorcycles.
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You're damn right lawmakers want to racketeer off gas guzzler profits. If cleaner air happens, it's a byproduct. CAFE struck fear into automakers in the '70s, hence Pinto and FWD based muscle cars. The potential billions in fines were a huge deal. Today they're much easier to swallow, a couple billion dollars here or there annually. The CAFE fines are still the same since the beginning, so thanks to inflation, everyone's happy and no cares about air pollution.
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