Source: CNBC
In 2021, a total of 1,093 motor vehicle recalls were submitted in the United States, according to the National Highway Traffic Safety Administration. That’s up 23% in just one year. Financial experts say one reason why automakers’ earnings multiples are lower than other companies is to do with the frequency of those recalls. That is especially true of legacy manufacturers such as Ford, GM, Stellantis, BMW, Toyota, Honda, Volkswagen and Hyundai. Meanwhile, new automakers like Rivian and Tesla present unique challenges and have contributed to recalls becoming more common. Other recalls have been of the deadly serious variety, such as the Ford Pinto that burst into flames in the 1970s, and the more recent experience of Takata, the airbag maker whose products appeared in automakers’ models from 2002 to 2015.
