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Fiat Chrysler Shares Plunge 12 Percent After EPA Accuses of Using Deceptive Software

Shares of Fiat Chrysler fell more than 12 percent after the EPA accused the automaker of using software that allowed excess diesel emissions.
Image: 2014 Jeep Cherokee Limited
2014 Jeep Cherokee LimitedChrysler Group LLC
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Shares of Fiat Chrysler fell by as much as 18 percent on Thursday after the U.S. Environmental Protection Agency accused the automaker of using software that allowed excess diesel emissions in about 104,000 vehicles.

The automakers shares were briefly halted after the EPA made the announcement, which alleged that Fiat Chrysler had violated the Clean Air Act by installing and failing to disclose "engine management software” on diesel models sold in the United States, including the 2014, 2015 and 2016 Jeep Grand Cherokee and Dodge Ram 1500 trucks with 3.0 liter diesel engines.

2015 Jeep Grand Cherokees are exhibited on a car dealership in New Jersey, July 24, 2015. REUTERS/Eduardo Munoz

Earlier this week, FCA's CEO Sergio Marchionne insisted Jeep and Ram diesel engines complied with federal emissions rules, telling journalists at the North American International Auto Show in Detroit, “We wouldn’t have sold them otherwise.”

The undisclosed software results increased nitrogen oxide emissions from the vehicles, the EPA said.

Related: Feds Probe Fiat Chrysler Over Inflated Sales Figures

The company could be liable for civil penalties and injunctive relief for the alleged violations, the agency said. It said it is also investigating whether the auxiliary emission control devices constitute "defeat devices," which are illegal.

Fiat Chrysler said Thursday it is "disappointed" that the EPA has decided to issue a notice of violation, and said its engines are "equipped with state-of-the-art emission control systems hardware."

FCA is just the latest in a series of automakers to be accused of cheating, both in the U.S. and abroad. Volkswagen admitted to criminal offences in rigging U.S. emissions tests and agreed to pay $4.3 billion in civil and criminal fines in a settlement with the U.S. Justice Department. Mitsubishi and Suzuki were caught rigging Japanese mileage tests, while Ford and Hyundai/Kia have been punished for providing inaccurate U.S. mileage numbers.

All have suffered financially.

Related: VW to Pay $4.3 Billion Penalty for Rigging Diesel Tests

“This deceit is as dangerous as the sickening smog these vehicles leave behind," said Michael Brune, the Executive Director of the Sierra Club. "Consumers deserve corporate accountability and clean cars that don’t make our families sick. No profit margin is worth poisoning our neighborhoods with toxic smog.”