Fiat Chrysler Automobiles revealed it could face costs of up to 722 million euros ($840 million) to resolve a Justice Department investigation into excess diesel emissions and following higher fuel economy penalties.
The automaker said the impact of a U.S. appeals court ruling in August overturning the Trump administration’s July 2019 rule that suspended a National Highway Traffic Safety Administration (NHTSA) regulation more than doubling fines for automakers failing to satisfy fuel efficiency requirements could be significant.
The automaker said in a securities filing that the amounts accrued could be up to 500 million euros ($581 million) depending on, among other things, and the company’s ability to implement future product actions or other actions to modify the utilization of credits.
In October 2019, the automaker said it incurred a $79 million U.S. civil penalty for failing to satisfy 2017 fuel economy requirements after paying $77.3 million for 2016 requirements.
FCA’s filing said it is not certain if NHTSA is going to appeal the ruling and unclear if the ruling will be implemented retrospectively to the 2019 model year.
If the higher rate were applied retrospectively, then the FCA may need to accrue additional amounts because of the increased CAFE penalties and additional amounts owed under certain agreements for the purchase of regulatory emissions credits, the automaker said.
Apart from that, FCA recognized a 222 million euro ($258 million) provision for settling the matters under investigation by the U.S. Department of Justice mainly related to criminal investigations associated with U.S. diesel emissions matters.
