A class action lawsuit has been filed against Ford by two dealerships, alleging that the automaker has fallen way short of paying reimbursement claims owed for parts and services while taking direct aim at EVs.
The details: The lawsuit, filed in the U.S. District Court for the Eastern District of Michigan on behalf of 440 Jericho Turnpike Auto Sales LLC and Patchogue 112 Motors LLC, claims Ford didn’t meet New York’s dealer law requirements for “reasonable compensation,” which generally means warranty reimbursements should match what dealers charge retail customers for similar non-warranty work.
According to the lawsuit, Ford paid only a fraction of the amounts owed on reimbursement claims, costing dealerships hundreds of thousands of dollars.
It goes on to claim that a large amount of those unpaid reimbursements are for EV batteries (usually the most expensive part of an electric vehicle), with replacement costs running up to $20,000 or more.
The suit, filed by the law firm Hagens Berman, alleges that Plaintiff Jericho was underpaid nearly $300,000 while Plaintiff Patchogue was underpaid over $615,000 for battery replacements.
The lawsuit also states that it represents “others similarly situated” dealerships, providing a link for other dealers who have not received the full reimbursements they are owed.
Important note: When contacted about the lawsuit, a spokesperson for Ford told CDG News, that the company typically does not comment on pending litigation.
Why it matters: Warranty reimbursement is a core lever in fixed-ops profitability and dealership cash flow. If the allegations are correct, they underscore how underpayments on high-dollar EV battery work can quickly turn warranty volume into losses, tying up technician capacity, parts dollars, and service-bay time while shifting EV risk and cost from the OEM to the retailer.
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Between the lines: With EV batteries at the center of the claims, the lawsuit also highlights Ford’s broader EV challenges, with the plaintiffs’ attorneys claiming, “Ford appears to be trying to save money on batteries by not fully reimbursing battery replacements at retail prices.
The attorneys contend 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, notes the lawsuit.
What they’re saying: “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, per a press statement. “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.”
Bottom line: This case puts a bright spotlight on how EV-era warranty economics are working in the real world and whether OEM reimbursement practices are keeping pace with retail labor and parts realities. Dealers should be watching for potential ripple effects: tighter documentation requirements, longer claim cycles, more pushback on battery-related ops, and a broader fight over what “retail” reimbursement should look like as EV repair costs climb.
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