Stellantis N.V. STLA is set to pay $4.2 million to the California Air Resources Board (“CARB”) after some of its vehicles were found to emit pollutants beyond legal limits. Local authorities discovered that certain models were equipped with unauthorized devices to bypass emissions controls, releasing nearly 55 tons of excess nitrogen oxides into the environment.

The affected vehicles include the 2014-2016 Ram ProMaster, Ram 1500, 2500 and 3500, all powered by 3.0-liter diesel engines. In addition to the fine, Stellantis will recall and modify these vehicles to meet California’s emissions standards.

Out of the $4.2 million penalty, more than $2 million will go to California’s Air Pollution Control Fund as a civil penalty. Per Reuters, the remaining $2.1 million will support a program encouraging cargo ships to slow down during peak whale and ozone seasons.

This isn’t Stellantis’ first run-in with emissions violations in the United States. In 2019, the company paid a $305 million civil fine for using illegal software in 2014-2016 Ram 1500 and Jeep Grand Cherokee vehicles with 3.0-liter EcoDiesel V6 engines. It also recalled and repaired more than 100,000 vehicles nationwide, spending around $800 million to resolve the matter.

Stellantis’ troubles continued into 2022 when it reached a plea deal with the Justice Department, agreeing to pay $96.1 million in fines and forfeit $203.6 million related to diesel emissions cheating. The company has also faced penalties for selling non-compliant gasoline-powered vehicles. In 2021, Stellantis paid $5.6 million in California after more than 30,000 Ram 1500, Jeep Grand Cherokee and Dodge Durango models with 5.7-liter V8 engines were found to violate state emission regulations.

Stellantis’ Zacks Rank & Key Picks

STLA currently carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks in the auto space are Dorman Products, Inc. DORM, Geely Automobile Holdings Limited GELYY and Blue Bird Corporation BLBD, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.66% and 51.98%, respectively. EPS estimates for 2024 and 2025 have improved 75 cents and 88 cents, respectively, in the past 60 days.

The Zacks Consensus Estimate for GELYY’s 2024 sales and earnings calls for year-over-year growth of 51.88% and 216.67%, respectively. EPS estimates for 2024 and 2025 have risen a penny and 12 cents, respectively, in the past 30 days. 

The Zacks Consensus Estimate for BLBD’s fiscal 2025 sales and earnings indicates year-over-year growth of 10.97% and 12.14%, respectively. EPS estimates for fiscal 2025 have jumped 18 cents in the past 30 days.

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Geely Automobile Holdings Ltd. (GELYY) : Free Stock Analysis Report

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Blue Bird Corporation (BLBD) : Free Stock Analysis Report

Stellantis N.V. (STLA) : Free Stock Analysis Report

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