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Ford Postpones Launch of Escape SUV Post Recall in Europe

Zacks.com logo Zacks.com 10/14/2020

Ford Motor Company F has decided to push back the launch of its plug-in hybrid Escape sport-utility vehicle (SUV) to 2021. This decision was made by the company when thousands of Kuga plug-in SUVs were recalled in Europe for heating up while recharging the battery.

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The Escape plug-in hybrid was originally planned to go into production this spring. However, manufacturing plants were closed for production for two months due to the pandemic, thus pushing the production of the SUV to the summer of 2020. The production, nevertheless, has now been further postponed to next year, as Ford is investigating the problems with its Kuga model in the European market, which has similar components like the Escape SUV, including the battery and engine.

 

Moreover, the delay in the Escape SUV’s launch has also been caused by the decline in demand for compact SUVs in the United States.

Recall of Kuga SUV in Europe

Ford recently decided to recall thousands of its best-selling plug-in electric hybrid SUVs from the European market following a safety issue after seven of the models caught fire while charging the battery.

 

Per the Detroit-based automaker, the vehicles probably caught fire because the fuel tank was in close vicinity to their batteries which got overheated while charging.

 

The gasoline-electric hybrid Kuga models hit showrooms only ths April. The firing problem has triggered a recall of 20,500 Kuga SUVs sold in Europe, highlighting an issue in the model which could take months to fix.

Existing customers of Kuga SUV have been directed by the company to use their cars in 'EV auto drive' mode only, which is the setting the car automatically reverts to when the batteries get exhausted.

This implies that the car owners cannot charge the batteries by plugging in to chargers and have to rely on the model’s 'self-charging' feature, in which the movement and braking of the car charges the vehicle's battery while it is on the run. This does not allow owners to use the car as a pure electric-only SUV.

 

Additionally, a free 500 Euro fuel card has been offered by the company to the owners of the defective SUV, along with a free three-year service and maintenance plan as a consideration for the fault.

Ford claims to be working with top priority to develop an approved and trusted solution to this defect.

With electric vehicles (EV) becoming the hottest trend in the auto space, companies like Tesla TSLA, General Motors GM and NIO Inc. NIO are taking considerable strides to provide green transportation with zero emissions. Ford is also committed to its goal of providing completely carbon-free transportation in the upcoming years and is revving up its electrification efforts in order to reach the target.

 

Plug-in hybrids form a crucial part of Ford’s long-term game plan to spend $11.5 billion in a bid to completely electrify its vehicle fleet as the automaker transitions from conventional petrol vehicles to battery-powered vehicles. Moreover, the auto biggie is set to commence production of its electric Mustang Mach-E in Mexico later this year.

Ford currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Notably, shares of the company have declined 16.6%, year to date, as against its industry’s rally of 144.8%.

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