Today, Ford Motor Company (F) said it was recalling over half a million of its Super Duty trucks. The affected trucks are from some batches shipped between 2017 and 2019. The company said that the front seat belt component in those vehicles may generate sparks during a crash. The sparks may ignite a fire in the floor carpet, increasing the risk of fatalities. The owners of the affected trucks are expected to take them to dealers, who will put tape on the carpet area to rectify the problem.
Ford stock was trading 0.6% lower at 10:41 AM ET. Broader indexes were trading roughly flat at that time. At the same time, General Motors (GM), a Ford rival, was down 0.4%. Tesla stock was trading flat at 11:10 AM ET.
The recalled Super Duty trucks belong to Ford’s F-250 family. The F-150 isn’t part of this recall. However, the company recalled 2 million F-150 trucks last year for a similar safety issue. The company fixed this issue at no cost to customers.
Ford F-150 electric is coming!
Meanwhile, the F-150 is the best-selling truck in the US. However, Tesla and other electric carmakers are challenging the company’s dominance in trucks. Tesla unveiled its first truck, the Cybertruck, on November 22. It received over 250,000 preorders within the first week. The company even showed the Cybertruck towing the mighty F-150 uphill during its launch presentation, angering Ford.
Ford’s F-150 is going electric and may debut around the same time the Cybertruck hits the market. The company has also invested in electric vehicle startup Rivian, which is launching its own truck, the R1T, in the same year. Interestingly, Rivian was catapulted into the spotlight in September when Amazon (AMZN) announced that it would procure 100,000 delivery vans from Rivian until 2040 to fight climate change.
Ford is going big on EVs
The F-150 isn’t the only electric vehicle Ford fans are looking forward to. Ford recently unveiled the Mach-E, a Mustang-based SUV that will compete with Tesla’s Model Y. Some Mach-E variants will hit the market next year, while others will come out in 2021. The market is expecting Ford to challenge Tesla’s dominance in the electric vehicle segment with the launch of the Mach-E and the F-150 electric. Credit Suisse analyst Dan Levy said, “Ford’s new [electric vehicle] should provide a more compelling alternative at the Model 3 price range than the other comps, especially given the performance focus.” Ford is planning to spend over $11 billion on its electric vehicle push in the next couple of years.
Why automakers are flocking to trucks and SUVs
Trucks and SUVs are in vogue. During the first 11 months of 2019, sales of passenger cars declined by 9.8% while Trucks and SUVs saw a 3.4% increase in sales. The overall consumer trend is leaning toward SUVs and trucks.
With the Mach-E and F-150 electric lined up and more on deck, Ford looks well equipped to take on Tesla. In the meantime, some Ford truck owners will have to visit dealerships to fix their recalled Ford Super Duty trucks.
Correction: An earlier version of this article suggested that Ford was recalling F-150s rather than Super Duty models.