The lawsuit, which was confirmed by the US Environmental Protection Agency (EPA) on Tuesday, could eventually result in a settlement similar to the one reached between the Justice Department and German carmaker Volkswagen.

US authorities accused Fiat Chrysler of placing undeclared defeat devices or auxiliary emission controls in 2014-2016 diesel vehicles.

As early as January, EPA officials said the Italian-American automaker used undisclosed software to allow excess diesel emissions in 104,000 Jeep Grand Cherokees and Dodge Ram 1500 trucks.

Software update?

Fiat Chrysler said last week it was planning to update software that it expected would resolve the concerns of US regulators about excess emissions in those vehicles.

The company has applied for certification to sell 2017 diesel models and said it was in talks to win approval for a software update to address potential irregularities.

Fiat Chrysler shares dropped by 3 percent immediately after the news about the lawsuit broke. The firm was not available for comment on Tuesday, but had earlier denied any wrongdoing.

hg/jd (Reuters, AFP)