The U.S. National Highway Safety Administration recently announced a massive recall that would affect nearly one million trucks due to a minor issue. The recall will affect 979,797 trucks due to missing information in the vehicle owner’s manuals. The recall has nothing to do with the vehicle’s engine or other mechanical components but pertained to the omission of instructions on how to remove or adjust “certain head restraints.”
Apparently, federal regulation requires that the owner’s manuals include instructions regarding these features on the seats of vehicles. It was determined that manuals for 37 different model-year vehicles and configurations did not meet these federal regulations. These vehicles include 2018-2023 Ford Expedition and Lincoln Navigator SUVs that have third-row seating along with 2019-2023 regular cab F-Series Super Duty F-250, F-350, F-450, F-550, and F-650 SuperCab vehicles that have three-passenger front bench seats. Reportedly, additional instructions will be added to the manual and mailed to affected truck owners. Ford determined the omission of these critical instructions was the fault of human error.
This month, Ford issued another recall for over 125,000 Ford Escape, Ford Maverick, and Lincoln Corsair vehicles over a heightened fire risk due to engine failure. Ford informed customers that if they hear unexpected engine noises, lose power, or smell smoke coming from the vehicle, they should park the car and shut off the engine as quickly as possible.
This is not the only major recall from a car manufacturer that has occurred recently. Chrysler recalled over 80,000 of its 2014-2019 Ram 1500 and 2014-2020 Jeep Grand Cherokee cars over potential crankshift failure problems. Also, nearly 12,500 of its 2022 Jeep Grand Cherokee vehicles were recalled for potential issues related to engine failure.
Earlier this year, the American Tribune covered issues Ford was experiencing with its EV batteries, leading to paused productions and shipment delays. Ford discovered these potential battery issues during pre-delivery inspections of its flagship electric truck, the F-150 Lightning. At the time of the article, Ford did not disclose the actual problem but noted that production and shipment of the vehicles would need to be paused.
Ford shares dropped after the announcement, given the hyper-competitive backdrop in the electric vehicle market. Tesla has shaken up the EV market through its ability to invoke economies of scale and “weaponize” price cuts. For example, the Tesla Model Y saw its price drop from $66,000 to $53,000. Furthermore, consumers could subtract another $7,500 from the price with a qualifying federal tax credit. Moreover, at the beginning of the year, Tesla prices dropped nearly 25 percent from last year’s peak. This price drop was roughly double that of the average industry-wide decline in car prices.
Traditional car manufacturers such as Ford are already operating on razor-thin profit margins for their EV lineups. Tesla’s ability to forego some of its strong operating margins is squeezing its competitors. Needless to say, Ford shareholders have not been pleased with these market dynamics. It will be interesting to see how companies such as Ford continue to compete in the EV market and also what implications this will have on the market for traditional gas-powered combustion engines.
