Renault shares recovered slightly after the French energy minister said tests conducted on Renault cars had not found any emissions cheating software.
Segolene Royal said tests had been carried out to establish whether vehicles on its roads were equipped with software similar to that used by scandal-engulfed Volkswagen in the United States to trick emissions tests.
"There is no fraud at Renault. Shareholders and employees should be reassured," Royal told journalists.
But she added that the presence of CO2 and NOx above accepted limits had been detected in the cars of other manufacturers.
Auto investors were taken on a wild ride earlier today, with Renault's share price tanking more than 21 per cent, dragging the rest of the industry with it, while trading in Fiat Chrysler was suspended amid claims it was lying about sales.
Renault's shares closed down 10.28 per cent, while Peugeot ended the day 5.05 per cent lower. Daimler and Volkswagen also slumped 3.3 per cent and 3.32 per cent respectively.
This afternoon Renault moved to calm investors spooked by reports it was facing a Volkswagen-style probe into its emissions, saying four of its cars had already passed an industry-wide inspection.
In total, 25 Renault vehicles are being tested by independent body the Royal Commission, which was set up in the wake of the VW scandal, out of 100. Renault said this reflected its market share within France.
"At end December 2015, 11 vehicles have already been tested, including four Renault vehicles, which allowed the French authorities to engage in a fruitful dialogue" with the industry.
So far, nothing untoward has been discovered. "This is good news for Renault," the car firm said.
The car giant said it was being double-checked by the Competition Policy, Consumer Affairs and Fraud Control "to definitively validate the initial analysis made by the independent technical commission".
"Renault teams cooperate fully in the work of the Royal Commission and the further investigations decided by the Ministry of Economy," the car firm said today.
"After the success of COP 21, Renault intends to accelerate its investment in industrial solutions service useful to the preservation of the planet."
Car makers have been under intense scrutiny since the Volkswagen scandal, which erupted in September last year, when it transpired that the German car giant had deployed an emissions cheat device that detected when it was being tested, and altered emissions accordingly.
In November, an environmental group based in Germany claimed Renault's Espace minivan had released diesel emissions that were 25-times over legal limits.
Separately, Fiat Chrysler has suspended trading in its Italy-listed shares, after the stock dropped more than nine per cent.
The share price fell after a specialist website reported that two lawsuits had been filed against the car company, accusing it of inflating US sales.
Automative News claims two dealerships in Chicago have filed a civil racketeering suit against Fiat Chrysler, alleging the company offered dealers "large amounts of money" to falsely report that vehicles had been sold.
A spokesman for the company told Automative News that he would not be commenting until they'd "had adequate opportunity to review what it alleges".