Ford Recalls Nearly 700,000 SUVs Over Fuel Injector Fire Risk

Ford is facing a significant challenge in 2025 due to its record-breaking number of recalls, with the latest involving nearly 700,000 vehicles including Bronco Sport models (2021-2024), Escape models (2020-2022), and Kuga vehicles (2019-2024) due to cracked fuel injectors that risk fuel leaks and potential fires. This recall is expected to cost Ford approximately $570 million, though the company states it will not impact adjusted earnings or free cash flow. Despite these setbacks and a total of 88 recalls issued this year—the highest in the automotive industry—Ford's sales remain strong, with record-breaking figures in SUVs and trucks, particularly the Bronco Sport, which has outsold the Jeep Wrangler for seven consecutive months. Investors have reacted negatively to the recall news, with Ford’s shares dropping over 2.5% following the announcement, and concerns are growing over rising warranty and recall costs, which have more than doubled to $2 billion in Q2 2024. Ford's management attributes the spike in recalls to a proactive approach to identifying issues early, but analysts worry this trend could hurt future earnings and stock performance. Despite the recalls, Ford's stock is up nearly 17% year to date, showing continued investor confidence in the company's overall performance and market position.