Ford Recalls 20,500 Plug-In Hybrids in EU, Delays US Launch Until 2021

Ford Motor Co. (NYSE: F) has been selling its Kuga plug-in hybrid electric vehicle (PHEV) in Europe since last year. In August, the company recalled all 20,500 sold in the 12 European Union countries and the United Kingdom due to the potential for the vehicles’ battery to overheat, increasing the risk of a fire.

The Kuga is not sold in the United States, but Ford had planned to sell the vehicle beginning later this year under its U.S. name, the Ford Escape. Now the company has delayed the U.S. introduction of the new Escape until next year.

Ford spokesperson Jay Ward told Bloomberg News that seven vehicle fires have been reported in Europe and that the issue “could take months to resolve.”

That’s not good news for Ford, which has seen Escape sales fall year over year by a third in the first three quarters of 2020. The new PHEV was aimed at stemming that slide and would have been the company’s second electric vehicle. The Mustang Mach-E already has been launched and is scheduled to begin production in Mexico later this year.

According to the EU’s consumer safety website, damage to a Kuga/Escape’s control module or connector “could allow water ingress to the module which may cause an electrical short” and could “cause one or more battery cells to overheat, increasing the risk of fire.”

Battery fires plagued Tesla back in 2013 following a spate of three fires in just six weeks. Boeing also had to deal with fires in its 787 lithium-ion batteries.

According to Bloomberg, Ford has told its European owners that they can continue to drive their Kugas but they should not plug the cars into charging units. Because these vehicles are PHEVs, they can run on their gasoline-powered engines, although without the fuel economy they paid for. Ford is softening the blow by extending the cars’ warranties and giving owners a €500 gasoline card to make up for the loss in fuel economy.

Ford’s stock traded down about 1.7% early Wednesday to $7.63, in a 52-week range of $3.96 to $9.57. The consensus price target on the stock is $7.90. Ford is scheduled to report third-quarter results on October 28.

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