Stellantis Faces $300 Million Fine for Emissions Cheating

• Stellantis is on the hook for up to $300 million in fines, and three FCA employees face potential criminal charges stemming from the creation and coverup of polluting technologies.

• The automaker pled guilty in June to wire fraud and violating the Clean Air Act, following a three-year investigation by the EPA and the FBI.

• Model-year 2014-2016 Jeep Grand Cherokees and Ram 1500s with the 3.0-liter EcoDiesel V6 are being retrofitted to comply with emissions standards while owners receive extended warranties and a cash settlement.

Over a decade ago, the automaker group formerly known as Fiat Chrysler Automobiles set out to produce the next generation of utilitarian turbo-diesel engines. Known for low-end torque and economical mileage, FCA chose Italian diesel manufacturer VM Motori to create this new powerplant, soon to be labeled as the EcoDiesel. The 3.0-liter V6 diesel was used in model-years 2014-2016 Jeep Grand Cherokees and Ram 1500 trucks (101,482 vehicles in all) and produced 240 hp and 420 lb-ft of torque. The engine also created significantly more emissions than federally allowed, but the team figured out a work-around. Now, the merged Stellantis group is on the hook for nearly $300 million in fines and forfeited money judgments after pleading guilty to intentionally cheating on federal emissions testing.

Similar to the defeat device used by Volkswagen, the Jeep and Ram models had software installed that would detect when Environmental Protection Agency emissions testing was happening and emit significantly less nitrogen oxides during these drive cycles. Additionally, the Department of Justice briefing says FCA US willingly deceived both federal regulators and customers by advertising the EcoDiesel engines as not only efficient in MPG but also lowly in emissions output. Without this on-and-off cycle software, the EcoDiesel models did not pass the emissions portion of regulatory tests and tarnished the advertised "best-in-class" fuel economy.

"Today’s sentencing of FCA US, which includes a $300 million criminal penalty, is the result of an exhaustive three-year investigation," said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. "This resolution shows that the Department of Justice is committed to holding corporate wrongdoers accountable for misleading regulators."

Following the extensive investigation, the company pled guilty to one count of criminal felony fraud conspiracy in June and was sentenced yesterday. Though the big hit to Stellantis will come in the form of fines, the company also must create an internal compliance and ethics program that will report directly to the Department of Justice. This program is a result of the failure to disclose the known emissions cheating information at the beginning of the investigation and a lack of remedial action on the part of Stellantis.

Beyond the corporate scrutiny, three FCA employees face potential criminal charges stemming from the creation and coverup of polluting technologies. Emanuele Palma, senior manager of diesel engine calibration at FCA North America, is joined by Sergio Pasini and Gianluca Sabbioni, managers and directors of FCA's diesel operation in Italy, who have all been indicted by the DOJ for violations of the Clean Air Act and wire fraud. Each of the employees awaits trial and could face up to 37 years in prison if found guilty on all counts.

The company has also faced scrutiny for emissions cheating in Germany, where investigators detected the diesel cheating earlier than US regulators did. European FCA offices were raided in July of 2020 in an effort to secure documents proving the existence of defeat devices, a raid spurred by German prosecutors investigating the emissions fraud.

Customers affected by the EcoDiesel scandal are in the process of having their vehicles fixed as a part of the settlement process. An emissions modification fix was approved by federal regulators in 2019 and has been implemented on many 2014-2016 model year Ram 1500 and Jeep Grand Cherokee models.

The settlement also included an extended warranty covering either 10 years from the initial sale or 120,000 miles, whichever comes first, in addition to an add-on of four years or 48,000 miles from the installation date of the approved emissions fix. Original owners were also eligible for a $3075 settlement while previous owners or lessees were eligible for $990. The claims portal has closed, and Stellantis says the consumer claims have been resolved.

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