Emissions software scandal threatens Fiat Chrysler

The US Environmental Protection Agency has issued a violation notice against Fiat Chrysler, stating that the company used management software in several diesel vehicles that reduced their emissions of toxic nitrogen oxides during testing, but allowed emissions to rise when the vehicles were on the streets. The company has denied any wrongdoing, but its shares fell 16% in value following the EPA's announcement.

A similar scandal engulfed German automotive giant Volkswagen last year, when it was accused of using software that detected when vehicles were being tested for emissions and altered their operation to run cleaner. The company was fined a total of $15 billion by regulators.

The EPA's notice alleges that Fiat Chrysler used the contentious software in Jeep Grand Cherokee and Dodge Ram models, leading to increased NOx emissions for three years, 2014, 2015 and2016. Failure to disclose this was a violation of the Clean Air Act, it adds. The agency has the power to order the company to recall the vehicles – which would affect some 104,000 vehicles in the US – but has not yet done so. A recall order might follow a further investigation, it said.