FCA faces the wrath of the EPA

The US Environmental Protection Agency (EPA) has lodged a complaint against Fiat Chrysler Automobiles (FCA) of failing to disclose software in 104,000 diesel pickups and SUVs that allows them to exceed pollution limits.

According to Automotive News, the EPA stopped short of calling the software in 2014-16 Jeep Grand Cherokee and Ram 1500s a “defeat device” but said the carmaker failed to disclose its use.

However, Fiat Chrysler Automotive said it meets all applicable regulatory requirements and will work with President-elect Donald Trump’s administration to contest the allegations.

The EPA and California Air Resources Board told the automaker they believe its auxiliary emissions control software allowed vehicles to generate excess pollution in violation of the law.

"Failing to disclose software that affects emissions in a vehicle’s engine is a serious violation of the law," said Cynthia Giles, assistant administrator for EPA’s office of enforcement and compliance assurance, in a statement. "We continue to investigate the nature and impact of these devices. All automakers must play by the same rules, and we will continue to hold companies accountable that gain an unfair and illegal competitive advantage.”

She added during a press conference: “As regard to penalties, the notice of violation describes the civil penalty provisions of the law that may apply. So the statue provides for civil penalties of up to $44,539 per vehicle sold for the violations that are alleged in the N.O.V.”

The maximum fine, in theory, were FCA to be found ‘guilty’, would be about $4.6 billion.

California Air Resource Board (CARB) chairman Mary Nichols said: "Once again, a major automaker made the business decision to skirt the rules and got caught."

The US Justice Department is investigating, according to FCA.

Meanwhile, New York Attorney General Eric Schneiderman said in a statement he is "deeply troubled" by the EPA findings and "will investigate the claims against Fiat Chrysler Automotive and stands ready to work with our state and federal partners."

FCA chief executive officer, Sergio Marchionne, during a call with journalists, angrily denied the company was cheating and has been in talks with EPA and made significant disclosures of documents.

"We have done nothing that is illegal," he claimed. "There was never any intent of creating conditions that were designed to defeat the testing process. This is absolute nonsense."

He characterized the dispute as whether the automaker had completely disclosed software that protects the engine, adding the company was planning updated software to address EPA concerns.

He said the EPA and the company could have settled the issue in "a more efficient way" without the EPA announcement, and he said "I'm really pissed off" about reports that equate FCA's issues with those of Volkswagen AG.

"The way that it has been described, I think, has been unfair to FCA, and that is the thing that disturbs me most," Marchionne said. He also suggested regulators had a "belligerent" view of automakers.

"There's not a guy in this (company) who would try something as stupid as (cheating on diesel tests) ... We don't belong to a class of criminals."

                                         Official statement

FCA said in a statement: "FCA US is disappointed that the EPA has chosen to issue a notice of violation with respect to the emissions control technology employed in the company's 2014-16 model-year light-duty 3-litre diesel engines. (These 3-litre engines are made by VM Motori in Cento, Italy and have compacted graphite iron (CGI) vee cylinder blocks.) FCA US intends to work with the incoming administration to present its case and resolve this matter fairly and equitably and to assure the EPA and FCA US customers that the company's diesel-powered vehicles meet all applicable regulatory requirements."

FCA claims 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.

According to Automotive News, it is not clear how incoming President Donald Trump's EPA will handle this or similar issues. Trump has nominated Oklahoma Attorney General Scott Pruitt, a critic of federal environmental regulation, to lead EPA.

Efraim Levy, an analyst with CFRA, has said that FCA stands to "get a fresh start with the Trump administration."

                              Analysis of the situation

In the view of jalopnik.com, the FCA’s actions were not as serious as those of VW.

“Let’s get straight to what Volkswagen did, because it was absolutely egregious, involved a cover-up, and was illegal. The company installed “defeat devices” on nearly 500,000 cars to trick regulators into thinking the vehicles were cleaner than they really were in real-world driving.

Jalopnik says that defeat devices are defined by the EPA as….....an auxiliary emission control device (AECD) that reduces the effectiveness of the emission control system under conditions which may reasonably be expected to be encountered in normal vehicle operation and use.

Keep in mind software can qualify as a “device” under this definition. It’s just a legal phrase.

It adds that EPA tests found that VW’s devices actually sensed when the vehicles in question were on the emissions rolls (dynos) being tested, and if they were, the software adjusted certain emissions parameters to clean up NOx from the tailpipe.

Volkswagen’s device used wheel speed and steering wheel sensors to tell when the car was being driven by a human on a road, or if it was strapped to a dynamometer, ensuring low NOx when under testing, but not when the consumer drives the car on the same drive cycle.

Jalopnik emphasizes that last bit because that is arguably the most damning part about what VW did: the company literally made it so that pollution during road driving was worse than when the car was tested even if the car was driven exactly the same way. VW played the EPA for foo

The website adds further that the EPA has yet to explicitly accuse Fiat Chrysler of installing a defeat device that actually senses when the car is on the emissions rolls being tested, and the company’s CEO Sergio Marchionne addressed this in a teleconference earlier today, saying:

Jalopnik claims “There is nothing in the current calibration of the Ram 1500 or the Grand Cherokee diesel that distinguishes between a test cycle and normal driving conditions. This is a huge difference because there has never been an intention on part of FCA to create conditions that are designed to defeat the testing process. That is absolutely nonsense. 

But what the agency has accused Fiat Chrysler of doing is failing to disclose all software features that could be considered auxiliary emissions control devices, or AECDs, which are defined as:…...any element of design which senses temperature, vehicle speed, engine RPM, transmission gear, manifold vacuum, or any other parameter for the purpose of activating, modulating, delaying, or deactivating the operation of any part of the emission control system.

These AECDs, the EPA alleges, cause the 103,828 Jeep and Ram vehicles equipped with 3-litre diesels to emit more pollution in conditions “reasonably expected to be encountered in normal vehicle operation and use” than under EPA test conditions.

According to the EPA, Fiat Chrysler allegedly failed to disclose the following eight AECDs, which tamper with exhaust gas recirculation, EGR, and selective catalytic reduction, SCR, under certain vehicle conditions: The EGR systems in these Jeep and Ram vehicles recycle exhaust gases back into the cylinders to reduce combustion temperatures and lower NOx emissions, and the SCR system adds urea to the exhaust stream to convert NOx into nitrogen and water.

In other words, these are the two systems responsible for lowering a vehicle’s NOx output under certain conditions. Software adjustments to these two systems work have a huge effect on tailpipe emissions, and the EPA thinks Fiat Chrysler is fiddling with these devices illegally.