It’s been about three years since Ford Motor Company (F -0.59%) CEO Jim Farley said that fixing quality was a top priority for the Detroit automaker. Farley also acknowledged the unfortunately large task would take several years to right. In a way, we can confirm that to be true, because in terms of recalls 2025 is turning into a disaster at Ford. Higher warranty claims have dinged company earnings in the past, so it’s important for investors to keep track of how badly these developments go. Let’s catch up on the latest speed bump for Ford.

Another day, another recall

Ford is recalling 1.9 million vehicles globally, with about 1.45 million in the U.S., due to a rearview camera issue that caused inverted, distorted, or blank images, according to the National Highway Traffic Safety Administration (NHTSA). The recall affects select model years for the Lincoln MKC, Navigator, Ford Mustang, F-250, F-350, F-450, F-550, Expedition, and Edge, among others.

Here’s the kicker: Not all recalls are created equal in terms of how deeply they impact the automaker. For instance, a recall for 10 million vehicles that can be fixed over the air with software updates could be cheaper than 1 million vehicles that require a dealership visit, manual labor, and/or parts. Unfortunately, many of Ford’s recalls this year have required some kind of physical inspection or fix for the impacted vehicles.

Ford’s sheer volume of recalls compared to competitors is nothing short of alarming. In 2025 Ford has issued a record 109 recalls in the U.S.; the next closest competitor is Stellantis with a much less alarming 30 recalls. It’s possible that Ford breaks 10 million vehicles recalled this year, which would be more than double the amount of vehicles it sold globally last year.

Previously in 2025 Ford has had recalls that could indeed be fixed over the air, but this doesn’t appear to be the case for this recall. Ford said it was aware of 44,123 warranty claims worldwide related to this recall and dealers will inspect and replace vehicle cameras. If that rings a bell, that’s perhaps because Ford agreed to pay a $165 million civil penalty in last November after an NHTSA investigation found that Ford failed to recall vehicles with defective rearview cameras in a timely fashion.

What it all means

The problem is that investors aren’t yet seeing evidence that Ford’s focus on quality is lowering its warranty claims costs, which again have dinged the automaker’s earnings in the past. In fact, you can see on the graph below that Ford’s warranty costs as a percentage of revenue have been on the rise for years.

Another concerning aspect of Ford’s plethora of recalls this year is that they cover an exhaustive list of problems including electronic, mechanical, or something less trivial such as trim issues. That suggests that it’s more of an overall problem rather than one single fault on one vehicle, as was the case with General Motors‘ previous massive ignition switch recall years and years ago.

Now to be fair, one could argue a focus on quality and recalls are correlated: As Ford increases its focus on quality, the number of recalls rises because it finds more problems it wasn’t initially hunting for. No matter how you slice it, it would certainly be nice to see some progress but 2025 seems like nothing short of a disaster for Ford’s recalls. Let’s just hope this one doesn’t ding the automaker’s upcoming earnings. Ford offers long-term investors a solid balance sheet and lucrative dividend yield, but it must fix its quality concerns and lower warranty costs.

Daniel Miller has positions in Ford Motor Company and General Motors. The Motley Fool recommends General Motors and Stellantis. The Motley Fool has a disclosure policy.

No, before you ask, e-commerce titan Amazon (AMZN 0.23%) has not bought struggling car rental company Hertz Global (HTZ 2.82%), nor has it gotten into the rental car business (at least, not yet). Instead, Amazon is offering used Hertz rental vehicles for sale through its Amazon Autos service.

Here’s why this looks like great news for Hertz and Amazon investors alike.

This is a test

Most potential car buyers won’t be able to run right out and buy a Hertz vehicle on Amazon Autos. This is essentially a pilot program being rolled out in just four cities. But if you’re one of the lucky few who live within 75 miles of Dallas, Houston, Los Angeles, or Seattle, you’ll be able to browse thousands of used Hertz vehicles on the Amazon Autos site, schedule a test drive, e-sign paperwork, and complete the entire purchase online, then pick up the vehicle at a nearby Hertz location.

Although the scope of this partnership is limited, it’s a big leap forward for Amazon Autos. When the site launched in December, it was limited to selling new Hyundai vehicles (and for most of us, still is). In early August, it began allowing Hyundai dealers in the Los Angeles area to list used and certified pre-owned vehicles on the site. As the site’s first fleet dealer, Hertz’s online offerings will allow Amazon to list cars from Toyota (TM -0.37%) and Ford Motor Company (F 0.72%), among others.

Why it’s good for Hertz

We don’t know exactly how many used vehicles Hertz sells each year, but the company says the number is in the “hundreds of thousands.” Assuming that means “more than 200,000,” that could mean Hertz’s annual sales approach Carvana‘s (CVNA -1.30%) 416,348. Both fall well short of CarMax‘s (KMX 4.19%) 1.3 million vehicle sales per year.

Some consumers shy away from buying used rental cars, arguing that drivers are more likely to put unnecessary wear and tear on a car they don’t own. Hertz should benefit from having its vehicles listed on a site that isn’t exclusively associated with its rental service. It also gains access to the hundreds of millions of customers who already shop on Amazon and trust the service. Given Hertz’s spotty profitability record, every opportunity to reach more customers is a benefit.

Why it’s good for Amazon

Like the rest of Amazon, Amazon Autos will operate better at scale.

Merchants offer their goods on Amazon’s e-commerce platform (despite the fees Amazon charges) because they know a lot of people look for certain types of products on Amazon first, only shopping elsewhere if they don’t find what they’re looking for. But if Amazon Autos never has many cars available, or only sells specific brands (like Hyundai), or is limited to new vehicles (which only represent about one-quarter of all U.S. auto sales), it’ll never be the first place people look when buying a car.

By partnering with Hertz (and with Hyundai and potentially with other car dealers), Amazon gets the best of both worlds: It dramatically increases its Amazon Autos offerings and doesn’t have to worry about managing, maintaining, or delivering an auto fleet of its own. It just lists the vehicles on its site (which costs next to nothing now that the site infrastructure is built) and takes a cut of any sales it generates.

If Amazon can continue to rapidly scale up its Amazon Autos service by making more deals, it could turn itself into the next CarMax. And CarMax, remember, pulls in tens of billions of dollars in revenue per year. The Hertz partnership is just the first step to achieving that scale, but I’m betting it won’t be the last.

John Bromels has positions in Amazon, CarMax, and Ford Motor Company. The Motley Fool has positions in and recommends Amazon and CarMax. The Motley Fool has a disclosure policy.

Is there a new clubhouse leader in the electric vehicle industry?

Lucid Group (LCID -1.09%) recently made an impressive headline. Its flagship vehicle, a premium all-electric sedan called the Lucid Air, set a new world record for the longest journey by an electric car on a single charge. The Grand Touring model of the Air traveled a whopping 1,205 kilometers, or approximately 749 miles. It’s an impressive feat, to say the least.

But is it enough to turn the stock around? Shares of Lucid Group have been a horrendous investment, dropping over 95% from their peak in 2021.

Here is what lies ahead for Lucid Group, and what that could mean for the stock a year from now.

Lucid’s technology may be awesome, but the company’s finances are not

The tricky thing about the electric vehicle business is that having a good product is a must-have, but it doesn’t solve all of your problems.

It’s costly to lay the groundwork for a successful automotive business, and you need to sell a lot of vehicles before you can manufacture them profitably. Tesla may have opened the door to opportunities for the rest of the electric vehicle industry, but companies must still get off the ground and build up to a point where the business can sustain itself.

Lucid Group reported impressive growth for the second quarter of 2025, delivering 38% more vehicles than it did the prior year. Unfortunately, that growth is from a small number. Lucid has delivered just 6,418 vehicles over the first half of 2025. As a result, the company operates at significant losses:

LCID Revenue (TTM) data by YCharts

The good news for the business is that Lucid has partnered with some deep-pocketed allies. Saudi Arabia’s Public Investment Fund is the company’s largest shareholder, and Lucid has established operations in the country. That likely means financial stability for as long as the company has that support. The flip side, and the bad news for other investors, is that Lucid Group’s share count has increased by nearly 80% over the past three years. The aggressive share dilution has contributed to the stock’s miserable performance.

Yet, the stock commands a premium over most of its peers

Despite the stock’s steep decline, its valuation isn’t all that appetizing. Lucid Group’s enterprise value is currently 6.3 times its trailing-12-month sales. That’s higher than almost every one of Lucid Group’s peers or direct competitors:

TSLA EV to Revenues data by YCharts

Tesla may not be an entirely suitable comparison, given the company’s size, market share, and involvement in additional businesses, including energy storage, autonomous vehicle technology, and humanoid robotics. Sure, Lucid Group is growing faster than legacy automotive manufacturers, but it’s also much smaller and deeply unprofitable.

Rivian Automotive is likely the closest comparison, and Lucid Group’s valuation is more than double Rivian’s. Both companies are currently deeply unprofitable and are working toward bringing new, more affordable models to market in hopes of achieving the sales volume that will sustain them financially.

So, where will Lucid Group be trading in one year?

That playbook worked for Tesla. Today, Tesla’s more affordable Model 3 and Model Y account for the majority of its sales. Lucid Group is developing a mid-sized SUV called the Lucid Earth, and it may be the smash hit that solidifies Lucid’s business, much like the Model 3 did for Tesla. But with the Lucid Earth unlikely to arrive before late next year or 2027, investors won’t find that out within the next year.

I suspect that Lucid Group may struggle to sustain enough growth to support the stock’s current valuation, especially now that the federal electric vehicle tax credit will end at the end of September. The stock’s valuation could easily retreat lower, closer to that of Rivian and other automotive companies, unless some unexpected and dramatic positive developments occur.

It’s only a prediction, but given Lucid’s short-term circumstances and steep price tag, it seems likely that Lucid Group will trade at a lower price in one year than it is now.

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends General Motors and Volkswagen Ag. The Motley Fool has a disclosure policy.