Fiat Chrysler faces $79M fine for fuel economy shortfall

Source: By Maxine Joselow, E&E News reporter • Posted: Thursday, October 17, 2019

Fiat Chrysler building. Photo credit: Fiat Chrysler Automobiles.

Fiat Chrysler Automobiles NV faces a $79.4 million civil penalty for failing to meet federal fuel economy and greenhouse gas standards for model year 2017, according to new data.

This marks the second year in a row that FCA has been hit with such a penalty. Last year, the Italian American automaker paid a $77.3 million fine for failing to meet the model year 2016 standards.

A Fiat Chrysler spokesman confirmed the fine, which was first reported by Reuters.

“FCA continues to support and deliver year-over-year fuel-economy improvements,” the company said in a statement.

“Further, we remain committed to invest $9.97 billion (€9 billion) through 2022 to develop vehicle architectures that will accommodate more than 30 electrified nameplates,” the company added.

The fine was revealed in new data posted to the National Highway Traffic Safety Administration’s website yesterday.

The data also showed that of 18 major automakers, 13 could not meet the fuel economy and greenhouse gas standards without relying on credits.

The credits are an important yet often overlooked aspect of the clean car standards. Essentially, they reward automakers for installing technology that reduces emissions but isn’t sufficiently captured by EPA compliance tests (Climatewire, Oct. 15).

The Trump administration is in the process of dialing back the clean car standards through model year 2025. One of its main justifications for the rollback is that automakers are struggling to meet the rules.

Publicly, automakers have said they don’t support the rollback. But an auto industry source, who requested anonymity because the source was not authorized to publicly discuss the matter, said the new data confirms that automakers are indeed struggling to meet the rules.

“Everybody was behind. Nobody can meet these standards. And model year 2019 is the ultimate exclamation point,” the source said.

The Alliance of Automobile Manufacturers, a trade association whose members include Ford Motor Co. and General Motors Co., said in a statement that complying with the standards is difficult when consumers continue to favor big trucks and SUVs over electric cars.

“Government fuel economy standards base compliance on what consumers buy, not what automakers put in dealer showrooms,” the group said.

“Automakers are giving consumers greater choice than ever before in highly energy-efficient vehicles, and we want to continue our progress,” it added. “Having invested billions of dollars in technologies to reduce fuel use and carbon emissions, we have a huge stake in moving new vehicles off dealer lots and into consumers’ garages.”

Environmentalists, meanwhile, view the standards as an essential tool for combating climate change by reducing planet-warming emissions from the transportation sector.

The Trump administration has already finalized the first part of the clean cars rollback, which calls for blocking California from setting tougher vehicle emissions standards than the federal government.

The second part of the rollback, which would significantly weaken the fuel economy and greenhouse gas standards through 2026, is expected to be released in November or December.