Fiat Chrysler Automobiles NV (NYSE:FCAU) stock dipped on Thursday on reports that the United States is preparing a lawsuit against the automobile company.
Recent reports claim that the U.S. Department of Justice (DOJ) is planning a lawsuit against Fiat Chrysler Automobiles NV over alleged excess diesel emissions. The reports come from two unnamed sources close to the matter. FCAU says that a lawsuit from the DOJ would be “counterproductive” to its current talks.
The two sources claim that Fiat Chrysler Automobiles NV and the U.S. Environmental Protection Agency (EPA) are discussing the matter of its alleged excess diesel emissions. The EPA says that the automobile company is using software to hide emissions in as many as 104,000 cars and SUVs.
The United States has reportedly been investigating the claims of excess diesel admissions from Fiat Chrysler Automobiles NV vehicles since last year. The EPA says that the investigation could result in a maximum fine of $4.6 billion for FCAU, reports Reuters.
Fiat Chrysler Automobiles NV isn’t the first automobile company to face allegation of using software to hide excess emissions. Volkswagen AG (ADR) (OTCMKTS:VLKAY) also faced similar claims. The problem resulted in it buying back at least 500,000 cars last year to resolve the issue. This costs the automobile company $18.2 billion. Following the scandal, the company announced plans to lay off 30,000 employees.
FCAU stock was down 3% at the start of trading on Thursday. However, it was only down 1% as of Thursday afternoon. The stock is also up 14% year-to-date.