Fiat Chrysler failed to disclose emissions software, EPA says

The U.S. Environmental Protection Agency on Thursday accused Fiat Chrysler Automobiles of cheating on its diesel emissions software to get better fuel economy for the Ram 1500 EcoDiesel pickup and other vehicles, allegations that CEO Sergio Marchionne quickly and forcefully disputed.

The EPA said it has notified Fiat Chrysler that it sold the software on more than 104,000 Jeep Grand Cherokee SUVs and Ram 1500 EcoDiesels, failing to to disclose engine-management software in those vehicles for the 2014-16 model years.

The undisclosed software results in increased emissions of nitrogen oxides from the vehicles, the EPA said.

"This is a clear and serious violation of the Clean Air Act," said Cynthia Giles, assistant administrator for EPA's Office of Compliance. "Some of the devices appear to cause the vehicle to perform differently when being tested and when in use."

Shares in Fiat Chrysler tumbled 10.3 percent, sliding $1.14 to $9.95, though the automaker immediately pushed back on the EPA's findings, saying it was "disappointed" with the agency's decision.

In a hastily arranged news conference, Marchionne said the automaker has been communicating with the EPA for more than a year and said the disagreement over the calibration of the engines is vastly different than the intentional installation of defeat devices found on Volkswagen vehicles in 2015.

"We are having a difference of opinion of whether the calibration met the regulations or did not meet the regulations," Marchionne said. "We find it strange, and it's unfortunate that EPA decided to do this this morning in such a public manner."

Marchionne questioned the timing of the EPA's announcement since the current administration will be in office only for another eight days.

"There was zero intent on our side" to cheat on emission regulations, Marchionne said.

On Wednesday, Volkswagen pleaded guilty to weaving a vast conspiracy to defraud the U.S. government and obstructing a federal investigation into its violation of emissions standards and agreed to $4.3 billion in fines and penalties.

The German automaker recently agreed to separate civil settlements worth about $17 billion for U.S. consumers and dealers who own diesel vehicles affected by the scandal, authorizing buybacks and free fixes.