Ford Is Losing Billions a Year Due to Recalls and Warranty Work

• Ford has spent $2.3 billion on recalls and warranty costs last quarter.
• The figure is more than GM spent on the entirety of its Bolt recall.
• Ford says its production quality has improved and that the next 12-18 months will reflect its efforts.

Ford’s battle with its own quality control processes and subsequent recalls continues, exacting a heavy toll on customer and company alike. The Blue Oval reported that it spent $2.3 billion on warranty and recall costs last quarter, up a massive $800 million in the first quarter of the year and $700 million more than this time last year. That means warranty and recall costs totaled some $25.5 million per day this quarter. The figure is a large one, especially considering the cost some other automakers have undertaken to resolve recalls of individual models. Chevy’s massive Bolt recall cost it $1.9 billion in its entirety, for example.

As of today, Ford has issued 37 recalls for the year — the most of any U.S. manufacturer, per the Department of Transportation. Ford has told the Associated Press that many of the issues are attributed to vehicles from the 2021 model year and older. Indeed, Ford’s largest recall this year, covering nearly 2 million Explorers built from 2011 to 2019, fits that description. However, almost half a million 2021-2024 Ford Bronco Sport and 2022-2023 Maverick vehicles were also recalled for electrical issues. Additionally, 243,000 Mavericks were recalled for faulty taillights, and a further 42,000 Bronco Sport and Escape SUVs had a recall for leaky fuel injectors.

Ford’s Chief Financial Officer John Lawler says that warranty and recall costs should come down over the next 12-18 months as Ford’s efforts to improve quality and lower warranty costs catch up.

Edmunds says

Ford continues to say its reliability issues are being addressed, but the numbers still show a rise in costs. If the company is to be believed, we should see these figures start to come down over the next year, along with improved reliability that consumers will benefit from.