Ford's Intensifying Recall Crisis: A Red Flag for Investors?

Yahoo

08-07-2025

U.S. legacy automaker Ford F is racking up recalls at a troubling pace in 2025, raising serious concerns about quality control and rising costs. In just the first five months of the year, Ford issued 81 recalls, exceeding the 67 recalls logged in all of 2024. These actions have impacted over 4 million vehicles, and notably, 80 of them required physical inspections or repairs, as over-the-air updates weren't enough, pointing to deeper quality and design flaws. June was no different, and this month has again brought quality issues that are hard to ignore. At this rate, Ford is on track to become the most recall-prone automaker in the United States this year.
The most recent recall involves more than 200,000 vehicles due to a rearview camera failure. A software malfunction can cause the camera to show a blank or frozen image, increasing the risk of crashes. The recall spans a wide range of models—including Explorer, Maverick, Mustang, F-150, and Transit Connect—built between 2018 and 2024.
That's just one of the many recalls of late. Recently, it also issued a recall for five units of the 2025 F-150 Lightning due to a brake fluid leak. Late last month, Ford recalled 130,000 Lincoln Aviator SUVs over parts that could detach while driving.That announcement came just days after a separate Ford recall was reported by the NHTSA. Ford had recalled 197,000 Mustang Mach-Es due to a rear seat entrapment risk.
While Ford is leading the recall count, other auto biggies like General Motors GM and Nissan Motor NSANY have faced issues too—but not on the same scale.
Ford's closest peer, General Motors, recently recalled 40,000+ Chevrolet Blazer EVs over potential rear brake wiring corrosion. General Motors issued a recall for airbag inflator defects in several Sierra and Silverado models, but the total impact was under 2,000 vehicles.
Japan's Nissan issued a major recall involving models like the Rogue, Altima, and Infiniti QX50 due to engine bearing defects that could lead to engine failure. Still, the total volume and frequency of recalls at Nissan are far below Ford's 2025 numbers so far.
While auto giants are facing recall issues, Ford is on a completely different level. And that's what investors need to be paying attention to.
Recalls aren't just bad press—they're expensive. From repair logistics and parts replacement to labor costs and dealership reimbursements, each recall eats into margins.
Ford has already warned of over $5 billion in losses this year from its EV division. Now, it's also staring down a mountain of potential warranty and recall-related expenses, which could put pressure on its financials even further.
Last year, Ford struggled with warranty costs and hoped 2025 would bring relief. Instead, the quality perception around the brand is deteriorating. If these trends continue, Ford risks losing both market share and consumer trust.
What It Means for Ford Stock
Ford is already under pressure—from EV transition costs to tariff risks—and now, its growing recall count is adding to the strain. While the company continues to roll out new models, those launches risk being overshadowed by ongoing quality concerns. For investors, this isn't just another bump in the road. If Ford can't address these reliability issues soon, the damage may extend beyond margins—it could erode long-term confidence in the brand.
Over the past year, shares of Ford have lost around 10% over the past year, underperforming the industry.
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From a valuation standpoint, F trades at a forward price-to-sales ratio of 0.29, way lower than the industry. It carries a Value Score of A.
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Take a look at how Ford's EPS estimates have been revised over the past 60 days.
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Ford currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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