Photographer: Daniel Acker/Bloomberg

Fiat Chrysler Can Resume Sales of Diesel Jeeps, Rams in U.S.

  • Emissions software approved for 2017 Grand Cherokee, Ram 1500
  • U.S. lawsuit over older-model diesel violations proceeding

Fiat Chrysler Automobiles NV can once again sell new diesel-powered pickup trucks and sport utility vehicles in the U.S. after environmental regulators approved modifications to its emissions-control software.

Approvals from the U.S. Environmental Protection Agency and California Air Resources Board will allow the company to sell 2017 Jeep Grand Cherokee and Ram 1500 diesel models. The agencies had withheld certification that emissions-control software on the vehicles complied with clean-air standards after finding violations in earlier models.

“We appreciate the efforts of the agencies in working with us to achieve this milestone," Fiat Chrysler Chief Executive Sergio Marchionne said in a statement. "We are anxious to build on this progress to make appropriate updates to the emissions control software in our earlier model-year vehicles.”

While Fiat Chrysler doesn’t break out what portion of its Jeep or Ram model sales are diesels, the powertrains are significant to the company’s marketing plans. The diesel Ram 1500 is rated the most fuel-efficient full-size pickup in the U.S., and losing it from the lineup would have been a setback to showrooms.

Fiat Chrysler’s U.S.-listed shares reversed earlier declines, climbing as much as 1.9 percent and trading at $11.97 per share at 11:26 a.m. in New York.

The approval is a partial win for Fiat Chrysler after several months of talks over the emissions software with EPA and California regulators to obtain approvals needed to resume sales. The EPA issued formal notices in January that the 2014 through 2016 models contained software functions that violated clean air rules.

Related: GM Suit Digs Deeper Grave for Diesel as Dirty Accusations Mount

The company still is facing civil suits by the Justice Department and from vehicle owners tied to so-called defeat devices in about 104,000 older diesels it has sold.

"The 2017 certification for the Ram 1500 and Jeep Grand Cherokee vehicles is separate and distinct from the current U.S. litigation in the Northern District of California for the installation of defeat devices in the 2014-2016 models of these vehicles," the EPA said in a statement.

A Justice Department spokesman wasn’t available for immediate comment.

Fiat Chrysler agreed to modify the software on the 2017 models and said no hardware changes will be required. The Italian-American automaker said the updates will have no effect on fuel economy ratings or performance of the vehicles.

Fiat Chrysler resumed production earlier this month of its diesel-powered Ram 1500 pickups. In its statement Friday, the company said it plans to ask regulators for permission to install the updated software in the older diesels containing the alleged violations.

Earlier: Fiat Chrysler Slumps as U.S. Suit Escalates Diesel Troubles

The vehicles were caught up in agency scrutiny of new diesel models that was intensified in the wake of Volkswagen AG’s diesel-cheating scandal.

Marchionne was outraged when the EPA brought its initial notice of violation against the automaker in January, calling the allegations “unadulterated hogwash.” He suggested that the agency had changed its standards for software disclosure after it failed to catch cheating by Volkswagen AG and said it was “absolute nonsense” to liken the two companies’ actions.

"I think Sergio Marchionne’s indignation in January over allegations that Fiat Chrysler had installed diesel-emission defeat devices has been vindicated,” Richard Hilgert, an analyst with Morningstar Research Services, said in an email. He rates the stock a buy.

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