Attention: TDR Forum Junkies 
TDRComm
Staff Member
EMISSIONS FINE FOR FCA (STELLANTIS)
Just prior to the printing of Issue 117 there was an announcement that there was an investigation by the EPA into diesel emissions fraud at FCA (Stellantis). In Automotive New’s May 30 magazine the details of the investigation were disclosed. Here are some quotes from the AN article that was sourced from the Reuters news outlet:
“Stellantis has agreed to plead guilty to criminal conduct and pay roughly $300 million in penalties to resolve a multi-year emissions fraud probe surrounding vehicles with diesel engines. The agreement covers more than 100,000 older Ram pickups and Jeep SUVs in the 2014 to 2016 model years.
“The plea deal comes five years after Volkswagen Group pleaded guilty to criminal charges to resolve its emissions crisis affecting nearly 600,000 vehicles in a scandal that has gripped the German automaker for nearly seven years.
“Negotiations between FCA lawyers and US officials to resolve the current probe dragged on for years and across presidential administrations as the two sides haggled over whether the company would plead guilty and, if it did, the exact details in any criminal charges.”
In the Reuters article there were three numbers that caught my eye. 100,000 units at FCA (Stellantis), fine 300 million; 600,000 units at Volkswagen Group, fine not noted.
Let’s see if the next news article/editorial from Automotive News will tie it all together.
PERSPECTIVE ON FINES
In the same 5/30/22 Automotive News magazine that announced the FCA/Stellantis fine there was an editorial that gives us some perspective, “Weak Fines Do Little to Deter Bad Behavior.”
From the numbers in the Reuters article, 300 million certainly gets your attention. However, there is some perspective to be found in the AN article:
“Stellantis will reportedly pay $300 million in penalties under a settlement reached with regulators, a relative pittance compared with the more than $2 billion Volkswagen agreed to pay in 2017 for its own felonious diesel emissions scandal, which involved far more vehicles. For perspective, $300 million represents about 29 hours’ worth of Stellantis’ North American first-quarter revenue.”
Let’s do some simple math to determine the cost-per-unit fine:
Stellantis $300,000,000 = $3,000 per vehicle
100,000 units
VW Group $2,000,000,000 = $3333 per vehicle
600,000 units
It looks like the going rate (in fines from the US government) for an infraction is about $3,000. So, with a new vehicle transaction price of $45-30,000, another way to look at the $3,000 fine would be 15%-10% of the transaction. I don’t know the margin of profit the manufacturer makes on a vehicle, but I’m guessing it is greater than 15%?
Here is some further “perspective” from the AN editorial:
“Reuters separately reported that Ford Motor Co. had agreed to pay a $19.2 million settlement to 40 states and the District of Columbia, collectively, for allegedly exaggerated claims over real-world fuel economy and payload capacity. Ford’s first-quarter revenue was $34.5 billion, meaning it generated $19.2 million in a bit more than 72 minutes on average.
“Similarly, in April, Tesla and Elon Musk each agreed to pay $20 million fines to the Securities and Exchange Commission over the CEO’s infamous ‘funding secured’ tweet in 2018. It took 138 minutes for Tesla to generate $20 million in the first quarter.”
At the conclusion of the AN editorial they noted: “Weak regulatory penalties are too easy for wrongdoers to ignore or simply accept as a cost of doing business. It’s time to put some real teeth back into the bite of those who police this industry, for everyone’s sake.”
Robert Patton
Thank you for your support of the Turbo Diesel Register. Consider subscribing to begin receiving the full benefits of TDR membership including receiving the quarterly printed magazine, annual wall calendar, total access to the TDR forums, TDR back issues, the Perfect Collection, and all the Turbo Diesel Buyer’s Guides we offer. Millions of miles of technical knowledge for only $35 per year.
Please visit us here to subscribe: Subscriptions (tdr-online.com)
Test Drives are Free: You can read a sample copy of the TDR magazine by downloading a digital (PDF) copy here: TDR Sample Issue (tdr-online.com)
Just prior to the printing of Issue 117 there was an announcement that there was an investigation by the EPA into diesel emissions fraud at FCA (Stellantis). In Automotive New’s May 30 magazine the details of the investigation were disclosed. Here are some quotes from the AN article that was sourced from the Reuters news outlet:
“Stellantis has agreed to plead guilty to criminal conduct and pay roughly $300 million in penalties to resolve a multi-year emissions fraud probe surrounding vehicles with diesel engines. The agreement covers more than 100,000 older Ram pickups and Jeep SUVs in the 2014 to 2016 model years.
“The plea deal comes five years after Volkswagen Group pleaded guilty to criminal charges to resolve its emissions crisis affecting nearly 600,000 vehicles in a scandal that has gripped the German automaker for nearly seven years.
“Negotiations between FCA lawyers and US officials to resolve the current probe dragged on for years and across presidential administrations as the two sides haggled over whether the company would plead guilty and, if it did, the exact details in any criminal charges.”
In the Reuters article there were three numbers that caught my eye. 100,000 units at FCA (Stellantis), fine 300 million; 600,000 units at Volkswagen Group, fine not noted.
Let’s see if the next news article/editorial from Automotive News will tie it all together.
PERSPECTIVE ON FINES
In the same 5/30/22 Automotive News magazine that announced the FCA/Stellantis fine there was an editorial that gives us some perspective, “Weak Fines Do Little to Deter Bad Behavior.”
From the numbers in the Reuters article, 300 million certainly gets your attention. However, there is some perspective to be found in the AN article:
“Stellantis will reportedly pay $300 million in penalties under a settlement reached with regulators, a relative pittance compared with the more than $2 billion Volkswagen agreed to pay in 2017 for its own felonious diesel emissions scandal, which involved far more vehicles. For perspective, $300 million represents about 29 hours’ worth of Stellantis’ North American first-quarter revenue.”
Let’s do some simple math to determine the cost-per-unit fine:
Stellantis $300,000,000 = $3,000 per vehicle
100,000 units
VW Group $2,000,000,000 = $3333 per vehicle
600,000 units
It looks like the going rate (in fines from the US government) for an infraction is about $3,000. So, with a new vehicle transaction price of $45-30,000, another way to look at the $3,000 fine would be 15%-10% of the transaction. I don’t know the margin of profit the manufacturer makes on a vehicle, but I’m guessing it is greater than 15%?
Here is some further “perspective” from the AN editorial:
“Reuters separately reported that Ford Motor Co. had agreed to pay a $19.2 million settlement to 40 states and the District of Columbia, collectively, for allegedly exaggerated claims over real-world fuel economy and payload capacity. Ford’s first-quarter revenue was $34.5 billion, meaning it generated $19.2 million in a bit more than 72 minutes on average.
“Similarly, in April, Tesla and Elon Musk each agreed to pay $20 million fines to the Securities and Exchange Commission over the CEO’s infamous ‘funding secured’ tweet in 2018. It took 138 minutes for Tesla to generate $20 million in the first quarter.”
At the conclusion of the AN editorial they noted: “Weak regulatory penalties are too easy for wrongdoers to ignore or simply accept as a cost of doing business. It’s time to put some real teeth back into the bite of those who police this industry, for everyone’s sake.”
Robert Patton
Thank you for your support of the Turbo Diesel Register. Consider subscribing to begin receiving the full benefits of TDR membership including receiving the quarterly printed magazine, annual wall calendar, total access to the TDR forums, TDR back issues, the Perfect Collection, and all the Turbo Diesel Buyer’s Guides we offer. Millions of miles of technical knowledge for only $35 per year.
Please visit us here to subscribe: Subscriptions (tdr-online.com)
Test Drives are Free: You can read a sample copy of the TDR magazine by downloading a digital (PDF) copy here: TDR Sample Issue (tdr-online.com)
