The US Environmental Protection Agency has accused Fiat Chrysler of illegally using hidden software that allowed significant excess diesel emissions, the result of a probe that stemmed from regulators' investigation of rival Volkswagen.
The EPA action affects 104,000 US trucks and SUVs sold since 2014, about one-sixth the number of vehicles than in the Volkswagen case. The maximum fine is about $4.6 billion.
The EPA and California Air Resources Board told Fiat Chrysler it believes its undeclared auxiliary emissions control software allowed vehicles to generate excess pollution in violation of the law.
Fiat Chrysler CEO Sergio Marchionne denied the company was cheating and has been in talks with EPA and made significant disclosures of documents.
"We have done nothing that is illegal," he said. "There was never any intent of creating conditions that were designed to defeat the testing process. This is absolute nonsense."
The company's US arm, FCA US, said in a statement it is "disappointed" with the EPA assertions. It said its "diesel-powered vehicles meet all applicable regulatory requirements."
EPA has reviews ongoing of other carmakers' emissions systems, but it is not clear if they have found any additional wrongdoing.
In April, Daimler said the US Justice Department had asked the carmaker to investigate its emissions certification process for vehicles including its Mercedes brand.
Regulators said FCA failed to disclose engine management software in 104,000 US 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3-litre diesel engines.
The undisclosed software results in increased emissions of nitrogenoxides (NOx).
EPA is still investigating if the software constitutes a "defeat device".
"Failing to disclose software that affects emissions in a vehicle's engine is a serious violation of the law, which can result in harmful pollution," said Cynthia Giles, an EPA official, in a statement.
FCA said it will prove to the EPA that its emissions controls are justified and not 'defeat devices' under applicable regulations.
The EPA said it has found at least eight undisclosed pieces of software that can alter how a vehicle emits air pollution.
EPA said Fiat Chrysler had recalled vehicles for one of the undisclosed pieces of software and had only used it in 2014 models.
By contesting the charge, FCA will push the case into the administration of President-elect Donald Trump. It is not clear how Mr Trump's EPA will handle this or similar issues.
