Fiat Chrysler faces up to $840 million in potential new US regulatory costs

  • Fiat Chrysler has said settlement talks remain ongoing and it is not clear if it will reach agreement with the Justice Department.
File photo: In October 2019, FCA said it incurred a $79 million US civil penalty for failing to meet 2017 fuel economy requirements after paying $77.3 million for 2016 requirements. (REUTERS)
File photo: In October 2019, FCA said it incurred a $79 million US civil penalty for failing to meet 2017 fuel economy requirements after paying $77.3 million for 2016 requirements.

Fiat Chrysler Automobiles NV (FCA) disclosed it could face costs of up to 722 million euros ($840 million) to resolve a Justice Department investigation into excess diesel emissions and as a result of higher fuel economy penalties.

The Italian-American company said the impact of a U.S. appeals court ruling in August overturning the Trump administration's July 2019 rule that suspended a National Highway Traffic Safety Administration (NHTSA) regulation more than doubling penalties for automakers failing to meet fuel efficiency requirements could be significant.

Also check these Vehicles

Find more Cars
Mahindra Global Pik Up (HT Auto photo)
UPCOMING
Engine Icon2498 cc FuelType IconDiesel
₹ 25 Lakhs
View Details
Hyundai Creta (HT Auto photo)
Engine Icon1497 cc FuelType IconMultiple
₹ 11 - 20.15 Lakhs
Compare
View Offers
Mahindra Thar (HT Auto photo)
Engine Icon2184 cc FuelType IconMultiple
₹ 11.25 - 17.20 Lakhs
Compare
View Offers
Tata Punch (HT Auto photo)
Engine Icon1199.0 cc FuelType IconPetrol
₹ 6 - 10.10 Lakhs
Compare
View Offers
Tata Nexon (HT Auto photo)
Engine Icon1497 cc FuelType IconMultiple
₹ 8.10 - 15.50 Lakhs
Compare
View Offers
Maruti Suzuki Swift (HT Auto photo)
Engine Icon1197.0 cc FuelType IconMultiple
₹ 5.99 - 9.03 Lakhs
Compare
View Offers

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."

Also Read : Fiat Chrysler's surprise profit gain bolsters PSA deal prospects

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 retrospectively to the 2019 model year.

If the higher rate were applied retrospectively, Fiat Chrysler "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."

Also Read : Honda joins Fiat in tapping Tesla for Europe emission compliance

Separately, FCA recognized a 222 million euro ($258 million) provision "to settle matters under investigation by the U.S. Department of Justice primarily related to criminal investigations associated with U.S. diesel emissions matters."

FCA in January 2019 agreed to an $800 million settlement to resolve claims from the U.S. Justice Department, California Air Resources Board and owners that it used illegal software that produced false results on diesel-emissions tests.

FCA said settlement talks remain ongoing and it is not clear if it will reach agreement with the Justice Department.

FCA separately agreed in September to pay $9.5 million to settle allegations it misled investors over its compliance with emissions regulations.

Volkswagen AG in 2017 as part of its diesel emissions Justice Department settlement pleaded guilty to fraud, obstruction of justice and falsifying statements.

First Published Date: 03 Nov 2020, 10:51 AM IST
NEXT ARTICLE BEGINS

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city

Want to get the best price for your existing car?

Powered by: Spinny Logo
By clicking "View Offers" you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city
Couldn't verify the OTP.
It's either expired or it's incorrect.