It's been about three years since Ford Motor Company (F +3.87%) CEO Jim Farley said that fixing quality was a top priority for the Detroit automaker. Farley also acknowledged the unfortunately large task would take several years to right. In a way, we can confirm that to be true, because in terms of recalls 2025 is turning into a disaster at Ford. Higher warranty claims have dinged company earnings in the past, so it's important for investors to keep track of how badly these developments go. Let's catch up on the latest speed bump for Ford.
Another day, another recall
Ford is recalling 1.9 million vehicles globally, with about 1.45 million in the U.S., due to a rearview camera issue that caused inverted, distorted, or blank images, according to the National Highway Traffic Safety Administration (NHTSA). The recall affects select model years for the Lincoln MKC, Navigator, Ford Mustang, F-250, F-350, F-450, F-550, Expedition, and Edge, among others.
Image source: Ford Motor Company.
Here's the kicker: Not all recalls are created equal in terms of how deeply they impact the automaker. For instance, a recall for 10 million vehicles that can be fixed over the air with software updates could be cheaper than 1 million vehicles that require a dealership visit, manual labor, and/or parts. Unfortunately, many of Ford's recalls this year have required some kind of physical inspection or fix for the impacted vehicles.
Ford's sheer volume of recalls compared to competitors is nothing short of alarming. In 2025 Ford has issued a record 109 recalls in the U.S.; the next closest competitor is Stellantis with a much less alarming 30 recalls. It's possible that Ford breaks 10 million vehicles recalled this year, which would be more than double the amount of vehicles it sold globally last year.
Previously in 2025 Ford has had recalls that could indeed be fixed over the air, but this doesn't appear to be the case for this recall. Ford said it was aware of 44,123 warranty claims worldwide related to this recall and dealers will inspect and replace vehicle cameras. If that rings a bell, that's perhaps because Ford agreed to pay a $165 million civil penalty in last November after an NHTSA investigation found that Ford failed to recall vehicles with defective rearview cameras in a timely fashion.
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Key Data Points
What it all means
The problem is that investors aren't yet seeing evidence that Ford's focus on quality is lowering its warranty claims costs, which again have dinged the automaker's earnings in the past. In fact, you can see on the graph below that Ford's warranty costs as a percentage of revenue have been on the rise for years.
Data source: Ford SEC filings. Chart by author.
Another concerning aspect of Ford's plethora of recalls this year is that they cover an exhaustive list of problems including electronic, mechanical, or something less trivial such as trim issues. That suggests that it's more of an overall problem rather than one single fault on one vehicle, as was the case with General Motors' previous massive ignition switch recall years and years ago.
Now to be fair, one could argue a focus on quality and recalls are correlated: As Ford increases its focus on quality, the number of recalls rises because it finds more problems it wasn't initially hunting for. No matter how you slice it, it would certainly be nice to see some progress but 2025 seems like nothing short of a disaster for Ford's recalls. Let's just hope this one doesn't ding the automaker's upcoming earnings. Ford offers long-term investors a solid balance sheet and lucrative dividend yield, but it must fix its quality concerns and lower warranty costs.
