The U.S. government is accusing Fiat Chrysler of failing to disclose software in some of its pickups and SUVs with diesel engines that allows them to emit more pollution than allowed under the Clean Air Act.
The Environmental Protection Agency said Thursday it had issued a "notice of violation" to the company that covers about 104,000 vehicles including the 2014 through 2016 Jeep Grand Cherokee and Ram pickups, all with 3-liter diesel engines. The California Air Resources Board took similar action.
"Failing to disclose software that affects emissions in a vehicle's engine is a serious violation of the law, which can result in harmful pollution in the air we breathe," said Cynthia Giles, EPA assistant administrator for enforcement and compliance.
Fiat Chrysler quickly issued a statement denying any wrongdoing.
EPA said it will continue to investigate the "nature and impact" of the eight software functions identified through its testing. Regulators were not yet defining the software as so-called "defeat devices" intended to cheat on government emissions tests. However, the agency said that numerous discussions with Fiat Chrysler over the last year had not produced any suitable explanation for why the company had failed to disclose the software, which regulators said caused the vehicles to emit less pollution during testing than during regular driving.
EPA officials said Fiat Chrysler may be liable for civil penalties for the alleged violations of the Clean Air Act. The EPA is investigating whether the auxiliary emission control devices constitute "defeat devices," which are illegal because they turn off pollution controls.
"This is a clear and serious violation of the Clean Air Act," Giles said. "When companies break the law, Americans depend on EPA to step in and enforce."
Fiat Chrysler said in a statement that its emissions control systems "meet the applicable requirements."
The company said it was disappointed with the EPA's action and intends to work with the incoming Trump administration to present its case. Fiat Chrysler said it spent months giving information to the EPA to explain its emissions technology and proposed a number of actions including software changes to address the agency's concerns.
Fiat Chrysler's shares fell more than 16 percent after the news was announced to $9.29.
The announcement comes one day after Fiat rival Volkswagen pleaded guilty in federal court to criminal charges related to widespread cheating involving emissions tests with its "Clean Diesel" line of vehicles. Six high-ranking VW executives have been charged in the scandal. VW agreed to pay a record $4.3 billion penalty for cheating on emissions tests.