Stellantis Pays $190.7 Million in Fuel Economy Penalties

Automaker Invests Heavily in EVs Amid Compliance Costs...

Robert S. Miller July 25, 2024

Stellantis North America HQ and Technical Center.

According to Reuters, the National Highway Traffic Safety Administration (NHTSA) recently disclosed that Stellantis (FCA US, LLC) paid $190.7 million in civil penalties for not meeting U.S. fuel economy standards for the 2019 and 2020 model years. The NHTSA, which oversees the Corporate Average Fuel Economy (CAFE) program, revealed these penalties on a government website.

Background on the Penalties –

Stellantis incurred these penalties before the company was officially formed in 2021, following the merger of Fiat Chrysler Automobiles (FCA) and the PSA Group. The company stated that these penalties do not reflect its current direction. Stellantis is investing over $54.4 billion globally to develop and produce electric vehicles (EVs), with plans to launch about two dozen models in the U.S. by 2030.

The company plans to have five all-new, all-electric models available by the end of this year. These models include the Ram ProMaster EV, Jeep® Wagoneer S, Dodge Charger Daytona, Jeep Recon, and Ram 1500 REV.

Previous Penalties and Future Expectations –

This is not the first time Stellantis has faced significant fines for fuel economy standards. In 2023, the company paid a record $235.5 million for the 2018 and 2019 model years and an additional $156.6 million for the 2016 and 2017 model years.

In March 2022, the NHTSA reinstated a significant penalty increase for automakers whose vehicles do not meet fuel efficiency standards for the 2019 model year and beyond. This change nearly tripled the penalties, encouraging better compliance with fuel economy rules.

Stellantis sign in front of Auburn Hills Headquarters. (MoparInsiders).

Future of Fuel Economy Standards –

The NHTSA’s proposal to raise fuel economy standards through 2032 initially projected that the auto industry could face $14 billion in fines over five years. This included $6.5 billion for General Motors (GM), $3 billion for Stellantis, and $1 billion for Ford.

However, under the finalized rules announced last month, the total expected fines for the auto industry from 2027 through 2031 have been significantly reduced to $1.83 billion. The NHTSA stated that the fines could be as low as zero, depending on how well automakers meet the new standards.

Biden Administration Awards Stellantis $584.8 Million –

Despite the penalties, the Biden administration has awarded Stellantis a total of $584.8 million to modernize its facilities for EV production. The company will use $334.8 million to convert its shuttered Belvidere Assembly Plant in Illinois. This conversion will enable the plant to build EVs like a new mid-sized electric pickup, breathing new life into the facility and creating new regional jobs.

Additionally, Stellantis will receive $250 million to revamp its Indiana Transmission Plant in Kokomo, Indiana. This investment will shift the plant’s focus to producing EV components, an essential step in expanding Stellantis’ EV offerings.

Source: Reuters

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MoparRay Jul 26, 2024 #1

Cafe economy standards should be scrapped. Let consumers decide what they want to buy.

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TripleT Jul 26, 2024 #2

Lot of profit or lower priced vehicles for meeting consumer demand.

TripleT Jul 26, 2024 #3

For sure CARB and CAFE become redundant. If it up to the States, as the courts have ruled, then leave it to the states, Definitely double dipping on this.

patfromigh Jul 26, 2024 #4

The Chevron decision has encouraged a lot of lawsuits against CAFE. Ironically California isn't the most anti-IC engines state out there. Some state regimes are worse, despite the tax revenue from oil companies and gas.

vbondjr1 Jul 26, 2024 #5

I have a question. When we had more cars in the lineup, did we have these fuel economy penalties? I'm watching Ford and GM come out with new V8s but I notice they have alot of other vehicles in their lineup besides muscle cars and they're not having these types of issues or if they are, they don't seem to be as devastating as they are to the Stellantis N/A brands. Don't get me wrong it was definitely time to switch up things with the Chrysler brand as the Charger/Challenger/300 have "essentially" been the same since 2005 so that's a good 20-year run. The Designs haven't Changed on the current gen cars since 2015. Not too many other cars can say that. While the way Stellantis is going about things may seem a little bit of a knee-jerk reaction, once you look into it, there may be a bit of merit to what they're doing. If, they execute it right and make the right lineup for each of the four brands.

Chrysler: Luxury (5-6 vehicle lineup. bring the 300 back as a BMW 5-series competitor/Tesla Plaid/Lucid Air competitor, Wagoneer=Chrysler Imperial, focus brand of EV/hybrid vehicles, Chrysler 200 = BMW 3/4-series/Tesla 3 competitor, Chrysler Valiant-Pacer = Rebirth of the Australian Mopar Legend brought to the States as a luxury muscle car and proper sister car to the Coronet muscle sedan, Chrysler Town & Country= Luxury minivan)
Ram: Trucks (Rampage, Dakota, 1500, an actual Ramcharger SUV to compete with the Tahoe/Expedition, 2500, 3500)
Jeep: All Terrain SUVs (STLA: Medium: Compass, STLA: Large: SJ-Type Cherokee STLA: Large: Grand Cherokee, STLA: Frame Wrangler/Gladiator)
Dodge: Every day vehicles/performance/heritage vehicles (STLA: Medium: Colt, Dart, Gen-2 Hornet, Nitro) (STLA: Large: Charger Coupe, Coronet Sedan, Monaco crossover, Durango SUV, Dodge Grand Caravan)

Stellantis' also needs to really commit to the Hurricane family of engines and make an entire family of engines to compete with what Ford has done with the Ecoboost platform. The Hurricane already does compete with the 2.7L Ecoboost, 3.0L Ecoboost and 3.5L Ecoboost in power for the most part but there needs to be a hot 2.4L Hurricane I-4 Turbo for the STLA medium/base STLA Large platform vehicles producing about 375-390hp and roughly 400-425lb-ft of torque along with a 2.2L Hurricane producing roughly 325-350hp and 350lb-ft of torque. That's not a hard feat to accomplish and still drops the carbon footprint down especially if these powertrains are mated to hybrid transmissions that can operated in zero emissions modes on some trim levels. If they can produce those kinds of 4-cylinder turbo hurricane powertrains on the lower end of the spectrum, have the 3.0L Hurricanes in the middle with up to 550hp, A 3.8L Hurricane could sit at the top with standard and high output variants. With 23.5% more displacement, the power output should be around Hellcat territory with a powertrain that would still help to reduce the carbon footprint and reduce the amount of fines and penalties Stellantis is having to pay. Yeah, it may be a little different than what we're used to but the power would still be there and Stellantis would be able to save some of that money and put it into programs like Direct Connection and Jeep accessories.

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