Fiat Crashes After EPA Accuses Carmaker Of Cheating Emissions Tests, "Skirting Rules & Got Caught"

It appears that, as we first predicted back in 2015, they were all doing it.

Fiat Chrysler shares are collapsing following EPA accusations that the automaker engaged in a similar scheme as Volkswagen, and used cheating software to beat diesel emissions tests, and this violated pollution laws. Why? Maybe it has something to do with Fiat's appeasement of the Trump administration, when last Sunday it announced a plan to Invest $1 Billion in the U.S. It forgot, however, that for the next 8 days, it is still Obama's country.

Sarcasm aside (correct though it may be), the EPA told the automaker it believes its auxiliary emissions control software allowed vehicles to generate excess pollution in violation of the law.

A person briefed on the matter told Reuters, Fiat Chrysler does not agree with the EPA's assessment. An automaker can use an auxiliary emissions control device in limited circumstances to protect the engine from damage, but it must be declared to regulators. 

The EPA allegations comes amid rising scrutiny by EPA of automaker emissions after Volkswagen AG admitted to cheating diesel emissions tests in 580,000 U.S. vehicles.

The EPA has for months declined to certify Fiat Chrysler's 2017 diesel vehicles for sale in the United States, but the automaker has continued to sell 2016 diesel models. In September 2015, EPA said it would review all U.S. diesel vehicles following an admission from Volkswagen that it installed software in cars allowing them to emit up to 40 times legally permissible level of pollution.

On Wednesday, VW agreed to pay $4.3 billion in criminal and civil fines and plead guilty to three felonies for misleading regulators and selling polluting vehicles.

The EPA has extensively investigated the vehicles and Fiat Chrysler has turned over significant documents as part of the probe, two people briefed on the matter said.

Fiat Chrysler could face fines of up to $37,500 per vehicle if it is proven that it violated emissions rules. The probe covers Fiat Chrysler diesel trucks and SUVs from the 2014-2016 model years.

Fiat Chrysler told CNBC it would contest the EPA's findings and denies it used "defeat software."

The stock crashed over 14% and was halted.

Fiat Chrysler is widely held among hedge funds... (and we note that Japan's GPIF holds over 10 million shares)

 

The supply chain is also being hit.

 

As AP reports,

Two people briefed on the matter say that the U.S. government is accusing Fiat Chrysler of violating the Clean Air Act on some of its diesel engines.

 

The Environmental Protection Agency has scheduled a news conference for Thursday morning to release details of the matter. The people briefed on the matter didn't want to be identified because the formal announcement hasn't been made.

 

The move comes one day after federal prosecutors announced that Volkswagen would plead guilty to criminal charges and pay a record $4.3 billion penalty for cheating on emissions tests.

The Environmental Protection Agency has scheduled a call with reporters at 11 a.m. in Washington to “take questions on a recent development regarding a major automaker.” Representatives for Fiat Chrysler didn’t immediately respond to requests for comment.

  • *FIAT CHRYSLER SAID TO DEFEND SYSTEMS AS LEGAL
  • *FIAT CHRYSLER POSITION DESCRIBED BY PERSON FAMILIAR WITH MATTER
  • *EPA SAID TO CLAIM CHEATING ON RAMS, JEEP GRAND CHEROKEES

EPA just released press release confirming the accusations.

  • *EPA SAYS FIAT-CHRYSLER `SKIRTED RULES AND GOT CAUGHT'
  • *EPA: FCA ALLEGEDLY INSTALLED & FAILED TO DISCLOSE SOFTWARE
  • *EPA: ALLEGATIONS COVER ROUGHLY 104,000 VEHICLES
  • *EPA: FIAT CHRYSLER MAY BE LIABLE FOR CIVIL PENALTIES
  • *EPA SAYS FIAT-CHRYSLER `SKIRTED RULES AND GOT CAUGHT'
  • *EPA INVESTIGATING WHETHER FCA SOFTWARE WAS `DEFEAT DEVICE'

 

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