Hyundai Motor and Kia are recalling millions of conventional vehicles for a fire risk. Owners are advised to “park outside.” Fires and parking outdoors make investors think of EVs, but these recalls have nothing to do with electric powertrains.
This week, the National Highway Traffic Safety Administration posted two recall notices impacting more than 3 million vehicles.
Hyundai (ticker: 005380.Korea) is recalling about 1.6 million vehicles made between 2010 and 2015. A brake fluid leak risks creating an electrical short. Dealers will replace a fuse for free. “Owners are advised to park outside and away from structures until the recall repair is complete,” reads part of the notice, dated Sept. 22. Notices typically show up on NHTSA’s website a few days after the date.
Kia
(000270.Korea) is recalling about 1.7 million vehicles made between 2010 and 2015. A hydraulic electronic control unit might short out, raising the risk of a fire. The unit will be replaced for free and owners, like in the Hyundai recall, are advised to park outside. That notice was posted Sept. 25.
Kia told Barron’s in an emailed statement that there would be no costs to owners, adding there have been no crashes, injuries, or fatalities related to the issue.
Hyundai had no estimate of the cost of the recall, which it said is being conducted “to ensure the safety of its customers.” No crashes, injuries, or fatalities have been caused by the problem, the company said.
The stocks so far don’t appear to have been impacted. Hyundai shares closed up 0.2% in overseas trading on Wednesday, while Kia shares closed up 0.6%.
Recalls don’t typically move stocks all that much. These are older cars, and recalls simply are a part of the business. The top 12 U.S. auto makers have recalled more than 18 million vehicles in the U.S. so far in 2023.
Ford Motor
(F) leads the way with about 4.7 million vehicles recalled.
Recalls have mattered more to investors lately because electric-vehicle recalls generate buzz. EVs are a relatively new technology, and investors and car buyers are still learning about them.
General Motors
(GM) recalled more than 50,000 Chevy Bolt EVs in August 2021 because of a battery fire risk. Owners were advised not to charge the car indoors at night. That recall affected the stock, but shares eventually recovered and the cost of that recall was eventually borne by the battery supplier.
That recall is a big reason why investors think EV when they hear recall and fire in the same sentence.
Tesla
(TSLA) recalls generate a lot of investor interest too. It’s the EV leader and the world’s most valuable car company. Most Tesla recalls never require a shop visit and are fixed with over-the-air software updates. Software fixes are a new phenomenon in the car business.
Millions of cars will continue to get recalled every year. It’s one way the NHTSA and the industry keep cars safe. Millions of EVs will get recalled in coming years, especially as more hit the road. Investors will eventually stop caring about every recall. That will be a sign EV technology is becoming mainstream.
Write to Al Root at [email protected]
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