On September the 24, 2018 the United States Environmental Protection Agency (EPA) dropped a bomb on the automotive industry announcing a settlement with Derive Systems addressing the sale of 363,000 units of its products. Derive is one of the leading software tuners in the industry and is the parent company to SCT and Bully Dog. The EPA alleged that these products were designed “to defeat the emissions control systems of cars and trucks in violation of the Clean Air Act.” This settlement, according to the EPA, provides a way for Derive to continue to sell, purchase, and use these tuning products. They have also been given a phase-out period for some of the features on certain products and new products will have to meet EPA standards in the future. However, not all of Derive’s products are affected and these items will continue to be sold as-is.
The EPA states that Derive manufactured and sold Advantage III tuning software and products with preloaded tunes. The EPA said, “That these products are designed to access and overwrite the original vehicle manufacturer’s software that was designed to reduce air pollution and comply with the Clean Air Act.” An example of this violation would be the removal or altering of catalytic converters or exhaust gas recirculation (EGR) systems by rendering them inoperative to the vehicle’s diagnostic system. Evidently, according to the Clean Air Act emission standards, this is does not comply and Derive violated section 203(a)(3)(B).
Now this is the part that gets interesting. The EPA lays out the necessary steps that Derive must take to prevent future violations of the Clean Air Act. If they do so, they will be able to continue and sell their products. According to the EPA, Derive will also have to spend approximately $6.25 million to implement the injunctive relief.
According to Derive the $6.25 million is not a penalty, it’s an estimate of how much they will have to spend implementing some new practices and procedures; this will help establish a new industry norm and standards of practice. The estimate also includes expenses to implement a representative testing program, remove user-adjustable options for EGR and rear O2 sensors from the small percentage of its tunes where it is currently an option, and to update training and marketing materials.
The EPA states that, “Some features of existing products must be discontinued to ensure that they are Clean Air Act-compliant (for example, by removing user-adjustable features that can turn off exhaust gas recirculation or rear oxygen sensors, or sensors in the onboard diagnostic system) according to a compliance schedule.”
We reached out to Jill Hepp, Marketing Director at Derive Systems for clarification. Jill stated, “Derive will be addressing two products: its pre-load calibrations (tunes) and its Advantage software, because [the] EPA expressed concern that some capabilities in features of these products could be manipulated by others to avoid [the] EPA regulations. None of Derive’s products need to be ‘fixed ‘retrofitted’ or recalled. To address concerns [the] EPA had that some of Derive’s products could be manipulated by others to avoid EPA requirements, however, Derive will be making minor changes to some of its tunes over the next several years.”
In the future the EPA wants Derive to be able to show that the use of future and past tuners will not adversely affect vehicle emissions. This brought up the question, will the future products still be as effective due to these terms? Jill states, “Yes. We will continue to offer industry-leading hardware and software that empowers customers to take control of their vehicles.”
Secondly, Derive must limit access to key emission control parameters in the Advantage III Software and create a customer verification program for users of this software.
Jill added, “Advantage is the only custom tuning software affected. The purpose of creating a customer training and verification program is to ensure that Derive knows who is using the Advantage software and what level of parameter access they require to achieve their calibration goals, and that all users of our Advantage software have a baseline level of knowledge as it relates to engine control and emission systems. We’ll notify our custom tuning dealers once the verification and training programs are available.”
According to the EPA Derive “must not advertise or provide training to demonstrate how consumers can defeat emission controls in their vehicles, and work with their national distributors to prevent the sale of their products if they are packaged with companion defeat devices, such as ‘delete’ pipes.”
Jill said Derive “has never approved of or condoned use of its products in conjunction with kits, such as straight pipes, that defeat emissions controls. It will continue to share that message, through its labeling, marketing materials, training, and reseller agreements.
Derive must train their employees to comply with the Clean Air Act. One section says that SCT will be forced to gather data on all its software users and hand over to the EPA as well as to search forums, YouTube, chat groups, etc. for violations.
Jill cleared this up by stating,“Derive will not identify any compliant users of the software to EPA. Derive must only identify users of the software that use the software for illegitimate purposes or do not properly complete the verification and training.” She continued, “We fully expect that the EPA will hold the rest of the tuning industry to the testing and other standards in the settlement. No other tuning company has a comprehensive, EPA-approved framework for tuning sales. Derive is the only ‘safe harbor’ in the market. We fully expect that EPA – and market forces – will drive the rest of the tuning industry toward the requirements in the settlement.”
As the EPA becomes more aware of the performance aftermarket industry it will be interesting to see what the future holds for some of these companies that are offering tuning capabilities to help you increase power. But here is the bottom line: t some point a line is going to be drawn by the EPA. On one side you will have street cars, on the other side you will have race cars. You will either need to keep emission controls fully functional or you will need to convert your car into a full-on race car, though even that is in doubt. We are getting to the point where there will be no in-between and sadly a street car can no longer double as a race car.”
We definitely appreciate Jill Hepp taking the time to clarify some of our questions and ultimately Derive working with the EPA to continue the manufacturing and sales of its products. If you are concerned about the Performance Aftermarket, we would strongly recommend that you head over to the SEMA website and sign the RPM Act and tell congress to protect the hobby that so many of us love.