Key Points
- More more than 870,000 F-150 trucks have been recalled due to a potential brake problem.
- Ford has warned of slow adoption of electric vehicles and has delayed its estimate to meet production targets.
- Automaker The EV Unit has lost more than $1 billion, and the company has raised its estimate of EV losses to the year.
Stocks of Ford Motor Company (F) fell as the automaker warned that electric vehicle (EV) adoption is proving slower than expected, and hundreds of thousands of its popular F-150 trucks were recalled in due to a potential problem with the emergency brake.
The company now plans to build electric vehicles at a rate of around 600,000 per year in 2024, a delay from its earlier estimate that the target would be met by the end of this year.
Ford said its Model e division, which makes electric vehicles, lost $1.08 billion in the second quarter and $1.8 billion in the first half. The automaker raised its estimate of the unit's annual loss to $4.5 billion. The company lost $3 billion on electric vehicles last year.
John Lawler, Ford's interim CFO and chief supply chain officer, said that during the transition to electric vehicles, “it could take a little longer.”
Ford recalls over 870,000 F-150
Adding to concerns over electric vehicles, stocks slumped on the word Ford is recalling more than 870,000 F-150 pickup trucks because the vehicle's electronic parking brake could suddenly activate. The company explained that a rear wiring harness can rub together and create a short circuit, triggering the brake and possibly causing an accident.
Ford said it received 918 warranty claims and three field reports of friction condition, with the brake activated in 299 of them, including 19 while the truck was driven. The automaker added that it had no reports of any accidents or injuries caused by the issue.
The recall covers select 2021 through 2023 F-150 with single exhaust systems.
Ford shares fell more than 3% in intraday trading on Friday, and are down about 14% since hitting a 10-month high earlier in the month./>
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Source: investopedia.com
