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Analysts wary over FCA lawsuit but say emissions not as bad as VW

MILAN - Any potential fines Fiat Chrysler (FCA) may need to pay to settle a US civil lawsuit over diesel emissions will unlikely top $1 billion, analysts said, adding the case appeared less serious than at larger rival Volkswagen. The US government filed a civil lawsuit on Tuesday accusing FCA of illegally using software to bypass emission controls in 104,000 vehicles sold since 2014, which it said led to higher than allowable levels of nitrogen oxide (NOx) that are blamed for respiratory illnesses. FCA's shares dropped 16 percent in January when the U.S. Environmental Protection Agency (EPA) first raised the accusations, adding the carmaker could face a maximum fine of about $4.6 billion. The stock has been under pressure since. Volkswagen agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, U.S. states and dealers. FCA, which sits on net debt of 5.1 billion euros ($5.70 billion), lacks VW's cash pile but analysts said its case looked much less severe. While VW admitted to intentionally cheating, Fiat Chrysler denies any wrongdoing. Authorities will have to prove that FCA's software constitutes a so-called "defeat device" and that it was fitted in the vehicles purposefully to bypass emission controls. Even if found guilty, the number of FCA vehicles targeted by the lawsuit is less than a fifth of those in the VW case. Applying calculations used in the German settlement, analysts estimate potential civil and criminal charges for Fiat Chrysler of around $800 million at most. Barclays has already cut its target price on the stock to take such a figure into account. Analysts also noted that FCA's vehicles are equipped with selective catalytic reduction (SCR) systems for cutting NOx emissions, so it is likely that any problem could be fixed through a software update. "Should this be the case, we estimate a total cost per vehicle of not more than around $100, i.e. around $10 million in aggregate," Evercore ISI analyst George Galliers said in a note. The estimates exclude any additional investments FCA may be asked to make in zero emissions vehicles infrastructure and awareness as was the case with VW. FCA said last week it would update the software in the vehicles in question, hoping it would alleviate the regulators' concern, but analysts said it may have been too little too late. The carmaker is also facing accusations over its diesel emissions in Europe.

In the Fiat 500X, the little things leave big impressions

When it comes to evaluating cars, we at Autoblog strive to tell you about the important things like how well they handle, how fast they are, and how comfortably they ride. These are all key pieces in the good car puzzle. The thing is, some cars also have small, but endearing details that are glossed over because they won't make or break our opinions of the vehicles. But they're features that make us smile anyway, and our long-term 2016 Fiat 500X happens to have a couple of them. The other week I had the Italian crossover for a day, and when I took off for lunch, I found the first surprise between the front seats. Unlike some other automatic transmissions with manual shift gates, this one actually uses the proper, racing-style sequential layout: pull back to shift up, and push forward to shift down. Some car companies flip that pattern, which I can only assume makes more sense to people that don't think about shifting. The 500X's other little surprise came that night as I drove home, but to properly explain why I loved it, I have to first talk about a different car. I own a 1999 Mazda MX-5 Miata, and one of my favorite things about it is that I can cruise around with one hand on the steering wheel and my elbow resting on the window sill. It's the most chill driving position imaginable. Unfortunately, as beltlines have crept higher and higher, and doors have migrated farther from the edges of the seats, the opportunity to drive this way has effectively vanished. To my delight as I drove home in the 500X, I discovered the little crossover bucked the trend. I'm not sure how, but it has window sills that are prime elbow perches. Neither of these features change my overall opinion of the vehicle, but they're worth noting because Fiat didn't have to include either of them. It's just a mass-market crossover, so a racing-style shifter and a comfy window sill would probably go unnoticed by most buyers. Yet, despite those facts, some designers decided the car would be better with these details. For that reason, I'm happy to draw attention to these designers' extra effort, and I will appreciate it every time I'm behind the wheel of our 500X. Related Video:

Feds sue Fiat Chrysler, accuse it of cheating on diesel emissions

WASHINGTON - The US government has filed a civil lawsuit accusing Fiat Chrysler Automobiles NV of using software to bypass emission controls in diesel vehicles. The Justice Department suit, filed in US district court in Detroit, is a procedural step that may ramp up pressure on Fiat Chrysler. The suit could ultimately help lead to a settlement, as in an earlier probe of rival Volkswagen AG that will cost VW up to $25 billion, but which affected a much larger number of vehicles. VW admitted to intentionally cheating while Fiat Chrysler denies wrongdoing. It did not immediately comment on Tuesday. US-listed Fiat Chrysler shares were down 2.9 percent at $10.44. The suit also names Fiat Chrysler's unit V.M. Motori SpA, which designed the engine in question. Reuters reported last week the Justice Department and EPA have obtained internal emails and other documents written in Italian that look at engine development and emissions issues that raise significant questions. The investigation has scrutinized VM Motori. FCA acquired a 50 percent stake in VM Motori in 2010 and the remainder in October 2013. The lawsuit asserts the Italian-American automaker placed undeclared "defeat devices," or auxiliary emissions controls, in 2014-2016 Fiat Chrysler diesel vehicles that led to "much higher" than allowable levels of nitrogen oxide, or NOx pollution, which is linked to smog formation and respiratory problems. The suit seeks injunctive relief and unspecified civil penalties. EPA said in January the maximum fine is about $4.6 billion. In January, EPA and California accused Fiat Chrysler of illegally using undisclosed software to allow excess diesel emissions in 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks. Fiat Chrysler said on Friday it plans to update software that it expects will resolve the concerns of U.S. regulators about excess emissions in those vehicles. The January notice was the result of regulators' investigation of rival Volkswagen, which prompted the government to review emissions from all other passenger diesel vehicles. Volkswagen admitted in September 2015 to installing secret software allowing its cars to emit up to 40 times legal pollution levels. In total, VW has agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting US vehicles.