Fiat Chrysler will pay $800 million in civil penalties and compliance costs to settle allegations that it installed "defeat device software" allowing its Jeep and Ram diesel vehicles to emit higher levels of nitrogen oxides while driving, the automaker said in a statement on Thursday.
The Associated Press reported Wednesday that a multi-part agreement would include civil penalties of roughly $311 million paid to federal and California regulators, in addition to $280 million to compensate drivers and $72 million to settle claims brought by other USA states.
United States officials said FCA's EcoDiesel Ram 1500 and Jeep Grand Cherokee for model years 2014-2016 were built with software created to operate differently during emissions tests compared with real-world conditions.
FCA also settled a class action lawsuit over the diesel issue and this means current and former owners will be eligible to receive a payment of approximately $2,800 (£2,195 / €2,434). The VW scandal extended to some 11 million other vehicles the company sold worldwide and led to USA criminal charges against eight people. Authorities say the vehicles were equipped with diesel engines programmed to run pollution controls during lab tests that would turn off under certain conditions on the road.
FCA has agreed to pay almost $400 million in civil penalties, including $305 million to the EPA, the Department of Justice, and CARB; $6 million to Customs and Border Protection; and $72.5 million to various state attorneys general.
The Justice Department also opened a criminal investigation into Fiat Chrysler's conduct, and several state attorneys general also were investigating. The company also agreed to buy back some vehicles, fix others, pay to mitigate environmental harm and settle lawsuits for a cost of more than $30 billion. It has already set aside about $810 million to cover settlements and other costs stemming from the diesel matter. The agency called the software a "defeat device" that changes the way the vehicles perform on treadmill tests in a laboratory.
However, under the terms of the settlement, no admission of guilt is required from Fiat Chrysler.
The expensive reprimand centers around Fiat Chrysler's use of illegal engine-controlled software, which allowed thousands of its diesel-fueled cars to produce false emissions tests results.
This settlement is not expected to outline any criminal charges.