Renault Shares Drop After Reports Of Emissions Probe
No emissions trail without fire... Photograph by Chesnot/Getty Images

Were They All At It? France Cranks up Probe Into Renault Diesels

Jan 13, 2017

Are the floodgates opening?

Only days after Volkswagen pleaded guilty to U.S. charges of fraud over excess diesel emissions, two more of Europe's biggest carmakers are feeling the heat.

French prosecutors announced that they will open a formal investigation into Renault, the country's largest automaker, on suspicion of "deception regarding key (performance) qualities and their measurement." The announcement follows a series of raids by officials last fall at a number of Renault sites.

The news comes hard on the heels of the Environmental Protection Agency accusing Fiat Chrysler, like Volkswagen, of having installed software aimed at tricking regulatory tests of emissions levels – in over 100,000 SUVs and pickups over the last two years. Fiat Chrysler's shares fell over 10% Thursday and opened down another 1.5% Friday. Although the much smaller number of vehicles at issue limits its initial liability to just over $4 billion, according to analysts, FCA's balance sheet is nowhere near as strong as VW's.

The news is no surprise to activists who have long warned that the actual emission of harmful nitrous oxides by diesel-powered vehicles was far in excess of what manufacturers claimed, and what EU and U.S. law allowed.

"Renault cars have consistently been shown to be amongst the worst polluters on the roads," said Greg Archer, head of clean vehicles at the watchdog Transport & Environment in Brussels. He cited independent studies showing that its latest models can emit over 14 times the legal limit of nitrous oxides.

Renault, in a statement, said that it "complies with French and European regulations" and that its vehicles "are not equipped with cheating software affecting anti-pollution systems."

The news is all the more eye-catching because the French state owns 20% of Renault, and is traditionally protective of industries it deems as strategic. Renault is one of France's biggest private-sector employers.

T&E's Archer said the move reflected "a clear shift" among policy-makers in Europe, where diesels have accounted for as much as half of all vehicles registered in recent years, and where the effects on air quality and public health are consequently much more dramatic than in the U.S..

France "is clearly clamping down on diesels, is encouraging the purchase of electric vehicles and has now clearly lost patience with Renault," Archer said.

CORRECTION: This article has been updated to reflect that it was the EPA, not the Justice Department, which issued the notice of violations against Fiat Chrysler on Thursday.

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