With 96 Recalls, Ford’s EV Plan in Doubt

By Douglas A. McIntyre Published Aug 14, 9:15AM EDT

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A new Ford Motor Co. (NYSE: F) electric vehicle manufacturing system comes with significant risk.
As if 96 recalls and warranty costs weren’t enough for investors to worry about.

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With 96 Recalls, Ford’s EV Plan in Doubt — © 2024 Getty Images / Getty Images News via Getty Images

Ford Motor Co. (NYSE: F | F Price Prediction) CEO Jim Farley said plans to build a new manufacturing system to produce its next-generation electric vehicle (EV) present a risk. “There are no guarantees,” he added. The primary risk, though unstated, is the company’s remarkably poor record as a car manufacturer. That overshadows the fact that its new car-building system has never been tried before.

Ford says its new “Universal EV Platform” is 40% faster than its current system. Speed is not the only benefit. The fact is that the plan saves money. And, Farley says, it will improve reliability.

“We transformed the traditional assembly line into a tree with three main branches,” Ford said. One will make the front of the car. The second one will make the back. The third branch is the “structural battery,” which will include seats, consoles, and carpeting.

Running a new system requires precision. Running a totally new one takes even more. Ford cannot look at a similar system at another company for benchmarking. That makes the task even more difficult.

Ford has had 94 recalls this year (by one count). The total number of vehicles recalled stretches well into the millions. This has happened despite regular comments that Ford can create better quality programs to ensure fewer mistakes.

The recalls have beaten down investors as well. And warranty costs hit Ford’s financials by $6 billion last year. The figure could be nearly as much this year, based on the company’s financial reports so far.

Ford’s significant risk for its new manufacturing system is not that it is new. The risk is that its manufacturing operations are so awful.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.