Is Fiat Chrysler in Trouble After WVU Emissions Test Failures?

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Fiat Chrysler Automobiles N.V. (NYSE: FCAU) was found to have some discrepancies in its emissions by West Virginia University researchers, up to 20 times the legal limit. The U.S. Department of Justice had previously alleged in a civil lawsuit as recently as a month ago that Fiat Chrysler has used illegal “defeat devices,” software that helps evade emissions tests.

These are the same researchers who first recorded the excess emissions that were found in Volkswagen earlier.

West Virginia University’s Center for Alternative Fuels, Engines and Emissions stopped short of accusing Fiat Chrysler of emissions cheating, but noted on-road tests of Jeep Grand Cherokee sport utility vehicles and Ram 1500 pickups revealed nitrogen oxide levels at three to 20 times what is permitted by U.S. clean-air rules.

The researchers tested five of the Jeep and Ram models from model years 2014 and 2015 in laboratories and on the road, using portable equipment to measure emissions. However, Fiat Chrysler believes that these results may be invalid because there is no regulatory protocol.

The company issued a statement that U.S. pollution standards for emissions are based on laboratory testing, so a comparison with on-the-road tests is “invalid.” Fiat Chrysler also said that the researchers’ appear to have obtained some of the results by driving faster and with more weight in the vehicle than the regulators call for.

In a report from Automotive News:

In its civil lawsuit against Fiat, the U.S. argues that any undisclosed software is illegal and that features within the automaker’s emissions control systems were designed to evade emissions tests. The case focuses on diesel engines in Jeep Grand Cherokee SUVs and Ram 1500 pickups for model years 2014 to 2016, alleging that they generate more emissions in normal driving than during laboratory tests.

Separately, General Motors was sued May 25 for allegedly putting defeat devices in two models of heavy-duty trucks from 2011 to 2016.

Shares of Fiat Chrysler were trading at $10.96 on Wednesday, with a consensus analyst price target of $15.51 and a 52-week range of $5.45 to $11.65.