Ford Leads in the Number of Recalls, Faces Costly Penalties

Ford Motor CompanyF has been outdoing all automakers in the number of recalls this year. In its latest recall, Ford had to pull out 694,271 SUVs in the United States and its territories. Models including 2021-24 Bronco Sport, 2020-22 Escape and 2019-24 Kuga vehicles were a part of this recall, amounting to about 858,000 vehicles globally. The impacted vehicles have a problem with fuel leaks that could heighten the risk of the vehicle catching on fire. The company is subject to a cost of $570 million, owing to the blow from the recall in its second quarter 2025 results.

NHTSA filing states that fuel injectors in some vehicles may crack, causing leaks that could lead to a fire. Drivers might notice a fuel smell, warning lights, smoke, or flames. According to NHTSA’s data, Ford has been topping recall filings since 2020, signaling its struggle with quality. Ford’s consent order with NHTSA might also be a reason why old and new recalls have been surfacing lately. This consent order also resulted in Ford agreeing to pay up to $165 million in fines, the second-largest civil penalty in NHTSA history, following the Takata airbag case.

Ford has responded to this issue with a software update that would redirect fuel away from ignition sources, but only as a temporary fix. Although no injuries resulting from this issue have been reported, eight vehicles experienced underhood fires. Ford claims that six of these vehicles had not been installed with the recommended software update. The company had a history of two similar issues that resulted in a recall of 42,000 vehicles. This recall supersedes the prior recalls, for which remedy developments are underway.

Shares of Ford have slumped 16.7% over the past year compared with the industry’s 4.2% decline.

F’s Zacks Rank & Key Picks

F currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space areFerrari N.V. RACE, PACCAR Inc. PCAR and Westport Fuel Systems WPRT. While RACE sports a Zacks Rank #1 (Strong Buy) at present, WPRT and PCAR carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RACE’s current-year earnings is pegged at $9.89 per share, indicating a 7.97% year-over-year rise.Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 10.75%. RACE’s shares have gained 15.8% in the past year.

The Zacks Consensus Estimate for WPRT’s 2025 loss is pegged at $1.27 per share, indicating an improvement of 40.93% from year-ago levels. The company’s earnings beat the consensus estimate in three of the trailing four quarters.

The Zacks Consensus Estimate for PCAR’s 2025 earnings is pegged at $5.72 per share. The company’s earnings beat the consensus estimate in one of the trailing four quarters, while missing it in the rest.

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This article originally published on Zacks Investment Research (zacks.com).

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