Lawsuit claims Ford systematically shorted dealers on required warranty reimbursements, including high-cost EV battery replacements

Hagens Berman has filed a class-action lawsuit against Ford Motor Company on behalf of Ford dealerships, alleging the automaker underpaid warranty reimbursement claims for parts and repairs — including high-cost electric vehicle (EV) batteries — in violation of New York’s Franchised Motor Vehicle Dealer Act (NYDA).

Filed in the U.S. District Court for the Eastern District of Michigan, the lawsuit claims that Ford failed to provide the “reasonable compensation” required under the NYDA, which mandates that franchise dealers receive reimbursement at mark-up rates no lower than what they charge retail customers for comparable non-warranty claims. Dealerships across the country seeking reimbursement for warranty-covered parts and labor since Dec. 1, 2022, may be affected. Learn more about your rights to a potential claim »

The lawsuit claims that Ford paid only a fraction of the amounts owed, costing dealerships hundreds of thousands of dollars. EV batteries — generally the most expensive component of an EV, with replacement costs reaching $25,000 in some models — represent a significant portion of the financial shortfalls. Dealers are expected to replace warranty-covered batteries for customers at no charge, then request reimbursement from Ford.

“Dealerships are the front line of Ford’s relationship with its customers, yet they’re being left to shoulder major financial losses,” says Steve Berman, managing partner and founder of Hagens Berman. “Ford franchisees are hundreds of thousands in the red for work they completed under Ford’s own warranty program. Dealerships shouldn’t be penalized for keeping Ford’s EVs on the road.”

Ford’s Gamble on EV Success

One plaintiff cited in the lawsuit replaced 28 EV batteries since early 2024. Based on Ford’s statutory markup requirement, the dealer should have received $22,600 per battery, totaling $632,000. Instead, Ford allegedly reimbursed only $600 per battery, leaving the dealer more than $615,000 short.

Attorneys argue that Ford’s alleged underpayments come at a time when the automaker’s EV sales are down 10% in the first seven months of 2025. Despite selling more than 240,000 EVs in 2025, Ford has reported ongoing losses, including over $5 billion in its Model e division.

In a highly competitive EV market and feeling the pressure to turn a profit, attorneys claim “Ford appears to be trying to save money on batteries by not fully reimbursing battery replacements at retail prices,” in direct violation of the NYDA.

Hagens Berman previously secured a monumental settlement valued at $1.67 billion on behalf of Volkswagen franchise dealerships harmed by the automaker’s concealed emissions fraud and continues to advocate for fair compensation for dealers nationwide.

The lawsuit seeks monetary relief for impacted dealerships. Learn more about the case and your potential rights as a Ford franchisee. »

About Hagens Berman

Hagens Berman is a global plaintiffs’ rights complex litigation law firm with a tenacious drive for achieving real results for those harmed by corporate negligence and fraud. Since its founding in 1993, the firm’s determination has earned it numerous national accolades, awards and titles of “Most Feared Plaintiff’s Firm,” MVPs and Trailblazers of class-action law. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.

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“Dealerships are the front line of Ford’s relationship with its customers, yet they’re being left to shoulder major financial losses,” says Steve Berman, managing partner and founder of Hagens Berman.