Fiat Chrysler Automobiles will settle with federal regulators and pay owners of diesel-powered truck and SUVs for noncompliant emissions software, the company announced Thursday. The settlement could cost the automaker up to $800 million.
The affected vehicles are 2014-2016 Jeep Grand Cherokee SUVs and Ram 1500 pickups with emissions controls that flouted legal standards.
FCA won't buy back any trucks or SUVs, but will offer a software fix to affected vehicles and pay owners up to $3,000 for the noncompliant software. FCA didn't admit any wrongdoing, but environmental regulators have said that the automaker "cheated" emissions standards with its software.
2014 Jeep Grand Cherokee EcoDiesel, New York City, Jan 2014
The settlement amounts are designed to compensate owners for the cost of the "diesel premium" they paid for their cars above what a comparably equipped gas-powered model would have cost.
Owners will also receive limited extended warranties of up to 10 years/120,000 miles from the original date of purchase of 4 years/48,000 miles from the date they get their car's emissions software updated.
To receive the settlement, owners will have to take their vehicles back to a Jeep or Ram dealer to have the software updated to clean up their emissions of nitrogen oxides, a major contributor to smog.
Former owners and lessees will be eligible for lower settlement amounts.
An attorney for a class-action lawsuit against the automaker said the fix isn't expected to alter the vehicle's performance or fuel economy.
2014 Ram 1500 EcoDiesel
FCA is required by the settlement to repair at least 85 percent of the vehicles or face fines of $6,000 per vehicle that isn't repaired.
The settlement doesn't cover a different emissions-related recall for larger Ram 2500 and 3500 pickups with a 6.7-liter Cummins diesel inline-6.
In addition, the FCA will pay $400 million in civil penalties to federal and state authorities.
The settlement affects about 100,000 vehicles. Last year, FCA set aside $800 million to settle the claims.
The company will also pay $19 million to California to support other emissions mitigation efforts in the state.
Bosch, a German automotive supplier that provided the original emission software will also pay more than $100 million to various state and federal agencies and more than $27 million to owners for its part.
Even as it agrees to the settlement, Fiat Chrysler claims that it did not deliberately scheme to install defeat devices to cheat emissions tests and it makes no admission of guilt regarding the charges.
“We acknowledge that this has created uncertainty for our customers, and we believe this resolution will maintain their trust in us,” said Mark Chernoby, FCA’s head of North American safety and regulatory compliance.
Authorities are targeting mid-May for the software update to be available, as the settlement still requires final approval by the court. Once it receives that approval, existing EcoDiesel owners will have 18 months to file claims and former owners will have 90 days.