In the waning days of President Obama’s second term, the Environmental Protection Agency issued a “notice of violation” to automaker Fiat Chrysler Automobiles that certain vehicles the company has sold don’t comply with the Clean Air Act. The specific charge: Pickup trucks and SUVs powered by the company’s diesel V-6 engine produce too much nitrous oxide, and the automaker used software to conceal the violation during emissions testing. The echoes of Volkswagen’s costly diesel emissions scandal were unmistakable. So, is it déjà vu all over again for diesel in America?
Some government regulators certainly seem to think so. Mary Nichols, the chair of the California Air Resources Board, said in a statement that “once again, a major automaker made the business decision to skirt the rules and got caught.” (CARB and EPA work together to test vehicles for emissions compliance and enforce air quality standards.) Considering that VW’s attempt to cheat on emissions rules by programming its diesel cars to run cleaner during lab testing has cost the automaker about $20 billion in various penalties, you can imagine why FCA’s stock price tanked after the news broke.
But is this the same situation exactly?
Let’s start with what we know. First, the EPA’s charges pertain to about 100,000 FCA vehicles: Ram pickup trucks and Jeep Grand Cherokees equipped with a 3-liter diesel V-6 engine. By contrast, almost 600,000 Volkswagen, Audi and Porsche vehicles were included in VW’s diesel cover-up. Two different diesel engines were fingered, spread across more than a dozen different models.
Second, VW eventually admitted wrongdoing. So far, FCA is disputing the charges. Chairman and CEO Sergio Marchionne has been typically outspoken in his denial that FCA attempted to circumvent the law. “There is nothing in common between the VW reality and what we are describing here,” he said in a media conference call shortly after the allegations were made, according to the Detroit News.
There’s no way to know right now exactly what FCA did or didn’t do. But some informed speculation is possible. I checked in with Bill Visnic, editorial director of mobility media at the Society of Automotive Engineers, to get his take.
The dispute between FCA and government regulators could come down to “semantics,” he says. Perhaps the automaker’s engineers tweaked their engine management software so that their diesel vehicles could just barely meet emissions limits while maximizing their fuel economy ratings. (The systems that diesel engines require to control emissions of nitrous oxide and other harmful pollutants tend to reduce mileage.) And perhaps FCA programmed their vehicles to throttle back those control systems during certain driving situations, on the grounds that the components need to be protected in order to last as long in real-world driving as federal regulations require. Maybe that resulted in vehicles that FCA engineers believed were fully in compliance, but which government regulators determined were cutting corners.
If so, that wouldn’t be quite the same as VW’s deliberate attempt to foil emissions tests with software that the company knowingly installed. Visnic’s scenario probably wouldn’t be such a black eye for FCA, especially if noncompliant vehicles could be brought up to snuff with a simple software upgrade. Of course, he adds, it could also turn out that FCA did in fact knowingly cheat and tried to cover it up, in which case the company’s legal and reputational woes could be substantial.
What about the bigger picture of diesel’s future in the U.S.? The technology has long been touted as a way to significantly improve fuel economy, especially in the trucks and other heavy vehicles that American drivers tend to favor. Diesels have long outperformed their gasoline cousins when it comes to mileage. And their low-rpm brawn makes them effective at hauling heavy loads. But Edmunds.com Senior Analyst Jessica Caldwell notes that diesel “has always been more of a niche” option for tech-savvy buyers. Only VW had systematically marketed diesels to American buyers, and now the company has pulled the plug in favor of advanced gasoline and hybrid engines.
But there are signs that other companies want to step into the void left by VW. Mazda has announced plans for a diesel-powered version of its popular CX-5 crossover SUV. GM is readying a small diesel for use in its Chevy Cruze compact and GMC Terrain crossover. Perhaps most tellingly, Ford just unveiled plans to offer a diesel in its F-150 pickup, the best-selling vehicle in the country. Given all of these product plans, “somebody doesn’t think diesel is dead yet,” says Visnic. Those companies know just how badly VW was hurt by its diesel scandal, and they are proceeding anyway.
Chalk it up to fuel economy rules. The federal government’s Corporate Average Fuel Economy (CAFE) standards get more stringent every year, and automakers are running out of low-cost ways to boost gas mileage. Lightening a vehicle or making it more aerodynamic can yield small efficiency gains. Installing a diesel engine in that same vehicle could be a game changer, with mileage improving by 10% or more.
Of course, automakers will keep working on other fuel-saving strategies, too: Everything from making cars lighter to offering more of them as electric or hybrid models. And the industry is already hinting that it would like to see President Donald Trump relax the CAFE fuel economy rules to reflect the fact that Americans are buying pickups and SUVs, not fuel-sipping compacts. But some version of CAFE is here to stay, and carmakers can’t afford not to invest in anything that might help them hit their efficiency targets. At least for now, that appears to include diesels.