Questions to the FCA GROUP ahead of the EMIS hearing

A 013189 15.12.2016 Committee of Inquiry into Emission Measurements in the Automotive Sector s to the FCA GROUP ahead of the EMIS hearing No. 1 Fiat Chrysler have been accused by the German authorities of using an illegal cheat device to switch off exhaust treatment systems. The KBA found that emissions treatment system was being throttled back after 22 minutes. The normal duration of the NEDC type approval test is about 20 minutes. However, you refused to appear before the KBA to explain and justify the defeat strategy used. Moreover, the Italian Ministry for Transport has said that the cars conform to current emissions rules and do not contain defeat devices. Could you please explain the rationale of the emission control strategy used and how this meet[s] the objective of reducing NOx emissions and at the same time preserve the engine from damage and the occupants from safety risks? We do not believe that it is appropriate for us to comment on the details of a matter which is the subject of mediation between the competent homologation Authority and the KBA and of litigation initiated by Deutsche Umwelthilfe. In general terms we can only reiterate that, as confirmed by the competent homologation Authority, the 500X complies with all applicable emission regulations. 500X meets the relevant Euro 6 limit in the regulatory NEDC test and does not detect that it is being tested. Contrary to allegations, 500X does not deactivate its emission control system after 22 minutes from cranking, but uses control strategies, which modulate the emissions control system solely to protect the integrity of the engine and the safety of the vehicle occupants in accordance with applicable regulations. FCA has provided evidence for the reasons of such control strategies, based on the features of the employed technology, the experimental evidence acquired through the extensive testing activities carried out at the time of introduction of the Euro 6 calibrations as well as for their subsequent update and problems encountered in the field. Our experience in conducting these activities justified the adoption of engineprotective strategies. Whether these strategies are justified is the only subject that we are aware of on which the KBA apparently does not agree with the competent vehicle homologation Authority. This is therefore a judgment as to whether another set of engine protective strategies would have been more appropriate at the time the vehicles were homologated. Any comparison of 500X to vehicles, which detect that are being tested is therefore 1

factually wrong and unacceptable. Allegations that FCA refused to cooperate with the KBA are also incorrect. FCA attended several meetings at the KBA s request. FCA provided extensive information and explanations to the KBA since November 2015. The Italian Homologation Authority repeatedly advised FCA and the KBA that it had exclusive jurisdiction on the matter and eventually insisted that its jurisdiction be respected and that FCA work only with it in testing the relevant vehicle to confirm its compliance with applicable requirements. FCA respected the competent Authority s determination both as to its exclusive jurisdiction as well as to the outcome of testing. As announced on February 2, 2016, FCA has undertaken voluntary steps to improve the emissions performance of its vehicles. In that context FCA has updated its Euro 6 calibrations, including that of 500X. The updated calibration, which ensures an improved and more stable emissions performance, is now not only implemented in all new 500X sold, but also available to all owners of 500X sold in the past at no charge. Therefore KBA s questions relate to a calibration that is no longer used in vehicles currently sold. 2 Regulation 715/2007 provides for three derogations on the general ban on the use of defeat devices: a) the need for the device is justified in terms of protecting the engine against damage or accident and for safe operation of the vehicle; b) the device does not function beyond the requirements of engine starting; c) the conditions are substantially included in the test procedures for verifying evaporative emissions and average tailpipe emissions. What is your understanding of the definition of defeat devices and the ban, which is imposed on their use? How would you distinguish them from the so-called cycle beating or defeat strategies? Are those one covered by the definition in the Art. 5(2) of the 715/2007 Regulation? Do you consider that switching off the emissions control system of a vehicle after operating the vehicle for 22 minutes of (slightly exceeding the 20-minute duration of the NEDC test) must be considered a defeat device? If not, which of the derogations outlined above do you consider to apply in these situations? A device which detects that the vehicle is being tested and alters its emission performance for the bench test is not covered by the exceptions provided in Art. 5 (a) (c) of Regulation 715/2007. Our vehicles do not detect that they are being tested. They also do not deactivate the emission control systems after 22 minutes after cranking, contrary to allegations. The emissions control system is modulated to protect the engine and the safety of the vehicles occupants. Modulation of the emission control system for engine and safety protection reason is not only allowed by 2

applicable rules, but indispensable. The derogation is set forth in letter a) of Art. 5(2) of Regulation 715/2007. In modern electronically controlled diesel engines, numerous sensors, software calibrations and algorithms must be used to modulate and control multiple aspects of the engine operation. This includes the operation of the emission control system. EGR and NSC management requires modulation by an electronic control unit employing software and/or hardware that embodies a control strategy. Examples include strategies that customize the management of emission control systems to, for instance, barometric pressure, intake manifold pressure, engine revolutions per minute, fuel rate (actual or average), ambient temperature, actual or inferred gear ratio, intake manifold temperature, engine coolant temperature, oil temperature, or any other inputs. Given that no diesel engine can function indefinitely under an intensive operation of the emission control system without exposing the engine to damage and the occupants of the vehicle to safety risks, strategies justified in terms of protecting the engine against damage or accident and for safe operation of the vehicle are permitted. Regulation 715/2007 does not contain a definition of terms like engine damage or accident or safe operation of the vehicle or effectiveness of the emission control system or normal vehicle operation and use, nor requires or prohibits the use of specified parameters in the modulation of the emission control system. Until the VW case, no further specification of EU regulatory limits, nor guidance from regulators, nor enforcement precedents capable of providing direction as to the strategies that could be considered justified were available. In that context manufacturers have been exercising their best judgment and their technical discretion to develop control strategies that respect emissions regulatory limits and at the same time preserve the engine from damage and the occupants from safety risks. These determinations were based on considerations which take into account, on a case by case basis, the expected performance of the vehicle and of the various components of the emission control system, the impact of their operation on the engine and the likely risks related to the functionality of the engine and the safety of occupants. Often such assessments were subject to refinement over time, based on field experience and additional testing. Only in recent times novel interpretations of the applicable rules surfaced, so restrictive as to contradict the literal meaning of the relevant regulatory provisions. 3 On 07.06.2016, EU Observer quoted Commissioner Bieńkowska saying that the car companies have not acted in good faith. She further stated that there is a lack of enforcement on a national level that had led to an environment in which carmakers believed they could get away with it. How do 3

you understand these statements? Do you feel you did not act in good faith with regard to the ban of defeat devices? Our vehicles comply with all applicable emission regulations and are certified by the competent authorities. We made good faith determinations based on applicable emission regulations and the results of extensive testing activities as well as our genuine concerns as to the protection of the engine and of the safety of the vehicle occupants. They were made in compliance with applicable regulations. We fully support the EU s efforts towards the adoption of a new testing procedure in order to bring it closer to real world driving conditions. Also, we advocate the prompt implementation of these new regulations. This will provide clarity for the customers and the industry. 4 Manufacturers are accused of not using the full potential of emission control systems of diesel-fuelled light duty vehicles on purpose, to increase the durability of the diesel particle filters. Would switching off the emission control and reduction systems result in a lower accumulation of ash and soot in the LDV's diesel particle filter? We do not believe that it is necessary to reduce the efficiency of the emissions control system to increase the life of the Diesel Particulate Filter ( DPF ). In new-generation diesel engines, low ash content oil are used and the DPF filters are designed from the beginning to take into account the maximum ash loading expected for the entire vehicle life time. FCA Emission Control System modulation does not have the goal to reduce the soot and ash accumulation in the filter, but is driven by the need to prevent and limit the formation of dangerous moist soot (rich of condensed hydrocarbons) that could create deposits leading to malfunctions of engine components (e.g. throttle valve, turbocharger turbine, EGR valve, etc.), with consequent safety risk for vehicle occupants. Moreover, a high loading of moist soot deposits could lead to NSC/DOC (catalyst positioned in front of DPF) malfunctions with consequent alteration of the regeneration capacity of the DPF filter that can result in anomalous backpressure increase and risk of engine shut off, with obvious consequences in terms of vehicle safety. 5 How many and which patents in the sectors of emissions reduction and of emission after-treatment, in particular of diesel-fuelled light duty vehicle engines has the Fiat Chrysler Group developed/filed? 4

Please see the below list. FAMPAT- XPN PRIORITY YEAR OBJECT of the invention EP0772737 1994 ADVANCED PILOT INJECTION CONTROL FOR FUMIGATION EP0784738 1994 POST-INJECTION FOR DPF REGENERATION EP1965065 1999 PARTICULATE REDUCTION STRATEGY DURING FUEL COMBUSTION EP1035314 1999 MULTIPLE INJECTIONS (MULTIJET) EP1281852 2001 STRATEGIES FOR DPF REGENERATION WITH MULTIPLE INJECTIONS EP1333165 2002 PHYSICAL MODEL FOR DPF SOOT LOADING ESTIMATION EP1336745 2002 CLOSED-LOOP LAMBDA CONTROL EP1541844 2003 MULTIPOST INJECTION CONTROL FOR DPF REGENERATION EP1541829 2003 PHYSICAL MODEL LIMITATION FOR DPF SOOT LOADING ESTIMATION EP1526266 2003 EXTENDED CYLINDER BALANCING EP1589213 2004 DIESEL ENGINE CONTROL STRATEGIES (LONG ROUTE EGR) EP1607606 2004 LINEAR LAMBDA SENSOR FOR EGR CONTROL EP1607609 2004 COMBUSTION CLOSED LOOP CONTROL FOR A DIESEL ENGINE OPERATING HIGHLY PREMIXED COMBUSTION EP1873369 2006 DPF REGENERATION STRATEGY EP2138693 2008 METHOD OF DETERMINING AMOUNT OF PARTICLUATE IN A DPF (PHYSICAL MODEL) EP2564048 ; EP2383454 2010 INJECTION RATE SHAPING 6 Who are FCA s suppliers of electronic injection systems and emission control systems? What inputs were given to the software managing emission 5

controls, and who programmed that software? The supplier of the electronic injection system is Bosch. The suppliers of the Engine Control Units ( ECU ) are Bosch and Magneti Marelli. We cannot elaborate or provide details in relation to individual contractual relationships with our suppliers, as the contracts with our suppliers contain confidentiality obligations to which we are bound. In general terms in our process FCA provides the supplier with the specifications of the components that need to interface with the ECU. The ECU supplier develops and owns the base software and the relevant source code; generally speaking the manufacturer does not have access to the source code. As to the values to be used to set the various software parameters, different solutions are possible. The supplier can be entrusted with the development of the complete calibration, including these values, or these values can be determined in cooperation between the supplier and manufacturer or can be communicated by the manufacturer to the supplier. The supplier then compiles the calibration values and the software that is loaded into the ECU of the vehicles. The final calibration is validated by both, manufacturer and supplier. The supplier participates in the relevant testing activity with the manufacturer. Actual upload of the final software and calibration to the ECU of the vehicle can be done by either supplier or manufacturer. 7 In your written answer to Q.2 from the questionnaire sent by the EMIS committee to car manufacturers, you claim that adoption of SCR emission strategies implies an incremental cost which can be estimated in the range of 600-1,300. However in response to the same question, PSA (Peugeot Citroën) claim that High Pressure-EGR + SCR, which was adopted by PSA as early as 2008, costs in the range of 200 to 500 euros. Please can you explain the enormous discrepancy in price estimates for SCR technology? The maximum estimated cost that we indicated in our answers relates to the product range on which the SCR is currently used (premium models) and includes the complete outfitting of the SCR system (catalysts, sensors, urea tank, dosing system, heated pipes, related vehicle changes, etc.). Our minimum cost estimate relates to future SCR systems to be used for small diesel powertrains. We are not in a position to compare our costs with PSA s costs, as we do not have (nor for obvious reasons do we wish to have) knowledge of the methodology used for that calculation and of the perimeter taken in consideration (elements included/excluded). As the Commission is no doubt aware, sharing of costs between manufacturers is forbidden under applicable competitions regulations. 8 Which criteria influenced your choice of the technical service and type approval authority for vehicles in the FIAT fleet you choose over the period between 2010 and 2015 for the whole type approval of the vehicles in your fleet, and for the type approval of emission systems? Could you provide concrete data and types of vehicles? What were the considerations? Have you changed the technical service and/or type approval authority in the 6

past, and if yes, for what reasons, what were your considerations? Historically, and therefore also prior to 2010, all aspects of the engine and emission system approval of the powertrain applications developed in Italy have been dealt with by the Technical Services of the Italian Ministry of Transportation (MIT). This applies to all FCA Italy and FCA US vehicles equipped with engines manufactured by FCA Italy. The reason for this approach is to minimize costs and time consumption. Vehicles developed in the U.S. are type approved by either the Netherlands Vehicle Authority (RDW) or the UK Vehicle Certification Agency (VCA), consistent with Chrysler s past practice. Only in exceptional cases, such as temporary workload peaks, or specific requirements for markets or vehicles engineered outside of FCA and produced under specific manufacturing/assembly agreements by other car manufacturers, other technical services are used. Practical examples are the Abarth 500 tested by UTAC for Japanese market requirements (such as fuel economy) and contract manufacturing projects like the Fiat Fullback, approved by the KBA and not equipped with FCA engines. The type approval authorities and the technical services we work with are unchanged since the origin of the European Community Whole Vehicle Type Approval process. 9 Has the so-called witness testing at manufacturers sites been used during the type approval procedure for light duty vehicles of the Fiat Chrysler Group? If so, what is the share of witness testing within the total number of type approval tests of the Fiat Chrysler Group? Yes, witness testing as provided for by Art. 41 (3)(b) of EC Directive 2007/46 is used, mainly for tests that are part of the regular type approval process, while specific tests that are not part of the regular development process of a vehicle are performed at third party laboratories, which can provide the relevant expertise. Similar procedures, which reflect industry practice, are equally applied in NAFTA, LATAM and APAC. These type of procedures are used in average for approximately 90% of the tests of the Fiat Chrysler Group worldwide. 10 The report of the Italian Ministry investigations, as transmitted to the Committee on 6 September, highlights that FCA vehicles emit about 200-300% more NOx on an NEDC cycle at hot start compared to cold start as defined by the NEDC standard type-approval cycle. The report seem to conclude that probably for the cold start a different "engine calibration" is used. Were you ever required, for instance during type approval processes or during the Ministry investigation to provide an explanation for the behaviour of the FIAT vehicles at hot start compared to cold start? Do engineering principles not imply that emission control technology would function more efficiently once they have been "warmed-up" i.e. at hot start rather than 7

at cold temperatures? What explanations do you give for this different behaviour on a cycle that is almost identical to the type-approval cycle except for the starting temperature? FCA has been in a continuing dialogue with the competent homologation Authority well before the report activities and has provided extensive explanations of the reasons for its calibrations, based on employed technology, results of testing activity and field experience. As to the results of the hot NEDC cycle, in certain high severity mission profiles with warm engine such has heavy urban, door-to-door, etc., emissions control systems need to be modulated for engine protection and safety reasons. High rates of operation of the emissions control systems in continuous and demanding driving cycles, may cause massive soot generation and progressive fouling of the components of the engine as well as a high amount of hydrocarbons and soot inside the engine combustion chamber and exhaust line system. This may ultimately end up in engine components fouling, increased lubricant oil dilution and irreversible damage to the structure and functionality of catalysts and particulate filter, i.e. in engine malfunctioning and component failure, with evident safety risk. This is why these kinds of protection strategies are widely used in the industry. 11 According to the report of 27 July 2016 sent by the Italian Minister of Transport to the EMIS Committee regarding the testing campaign of Euro 5 vehicles on the roller bench and on the road, you have tested all 7 models belonging to the FCA group. Which authority type-approved these models? Did your in-house technical services provide the technical documents for them to be type-approved? Have you taken part in the planning of the Italian testing program? Can you explain why 3 vehicles of the FCA group (Giulietta Alfa Romeo 1.6, Lancia Y 1.3 and Jeep Cherokee, the later showing the highest NOx emission on NEDC at warm start) have not undergone the same set of tests as the other vehicles? Can you explain why you have not performed the test regarding the efficiency rate of EGR in relation with the temperature of the intake air as was done for all non-fca models? Can you exclude that FCA models show any difference in EGR efficiency at different external temperature? We did not participate in the planning of the tests by the Italian Ministry and cannot speak for the Ministry. We received the list of vehicles to be tested (that we understand were chosen as a function of their share on the Italian market) and the type of tests to be carried out from the Ministry. The tests were carried out at our technical services/laboratories which are certified by the Italian Ministry of Transport and by the Correlation Circuit of Roller Benches managed by CUNA (National Committee for Unification for Vehicles). During testing representatives of the Italian Ministry of Transport were present at all times. Representatives of the Ministry checked the vehicles, tested the procedures and instrumentations and reviewed and signed all reports. All the FCA vehicles tested were taken from the field as usually done for In Use Compliance Tests and in accordance with the relevant procedures. 8

The FCA models tested were type approved by the Italian Ministry of Transport. We are not aware of any reason other than time and logistics constraints for the three FCA vehicles you mention not being tested on the road and for the EGR efficiency measurements not being performed on all vehicles. We also note that additional tests, which were not carried out for non-fca models, were performed on the FCA models, like the Warm Reverse NEDC (first ExtraUrban phase and then Urban phase). Finally, as to EGR efficiency, we have already explained that emissions control systems must be modulated for engine and safety protection reasons. Modulation is not only allowed, but it is necessary. For instance, the huge spike of HC/CO, evident at fixed EGR rate as a function of progressively reduced ambient temperature can t be tolerated not only for engine combustion instability (higher risk for misfire) but also because no DPF soot loading model could be managed accurately inside the ECU in such unstable operating conditions. Model accuracy is mandatory to manage properly DPF regeneration events while guaranteeing ATS and engine components reliability. These modulations fall within the exception provided for by letter a) of Art. 5(2) of Regulation 715/2007. 12 Regulation 715/2007 is a relatively old regulation that aims to improve air quality by setting an NOx emission limit of 80 mg/km. We have now learned that the 80 mg/km limit is not respected by the vast majority of the current car fleet. The lifetime of a car is quite long. How you see the applicability of retrofitted emission control techniques to reduce the emissions below the limit value of 80 mg/km? Please explain what would be your strategy to reduce the emission of the current car fleet to comply with the current Regulation 715/2007 in the short term. Please note that the 80 mg/km was intended accordingly to the currently prescribed NEDC test cycle, and, as such, it is met by the whole FCA fleet. That said FCA has already taken proactive steps to improve the emissions performance of its E6 vehicles in preparation for the application of the new RDE Regulation starting from 1 September 2017. As announced on February 2, 2016, FCA has updated its Euro 6 calibrations with new data sets, which provide a better and more stable emission performance of its vehicles. These new calibrations are now used in in the vast majority of the new vehicles sold (shortly in all vehicles sold). The new calibrations are in the same manner also being made available to owners of all Euro 6 FCA vehicles, at no charge. This initiative is a voluntary measure and does not constitute a recall campaign. In addition, as announced, FCA intends to accelerate its on-going programs to expand application of Active Selective Catalytic Reduction (or SCR) technology that is already used in certain FCA vehicles, to make it available on other diesel engine families in 2017, earlier than originally planned. 9