The Largest Car Brake Recall In Recent History Cost This Company A Ton Of Money
When thinking of high-performance, luxury vehicles, BMW usually comes up on everyone's list. The German automaker has been in business since 1916, churning out over a century's worth of sought-after coupes, sedans, and sports models while building up to a healthy stock value of $88 per share. But that was in 2015. BMW's stock has been on a bit of a rollercoaster ride since then thanks to economic fluctuations, leadership changes, and recalls. Yes, recalls. Despite its reputation of quality and luxury, BMW is not immune to error. One such error cost the automaker big-time in 2024. A faulty brake system resulted in the company issuing multiple recalls that year, affecting a whopping 1.5 million+ vehicles worldwide.
Replacing the brake systems on every affected car free of charge, the recall ended up being so costly for BMW that sales projections for 2024 were lowered. Of course, this was also because many of the affected models were from the 2024 and 2025 lineups, which were pulled from the lineup before they could be sold. It also doesn't help that the automaker's stock took a hit. Naturally, a recall isn't what any shareholders or potential buyers want to hear (even if a BMW may not be the best investment, especially if you're retired and looking for a vehicle), though the whole point of them is to prevent accidents and subsequent further costs. Still, some recalls have costs auto companies far more, and, in some cases, have even caused companies to go bankrupt.
Just how much did the recall cost BMW?
Auto recalls vary tremendously in how much they cost, depending on the amount of vehicles affected as well as how extensive the fix is and what parts are involved. Just under 80,000 vehicles were affected when BMW issued its initial brake recall in February 2024. However, the issue escalated as the year wore on, and the recall was extended that fall to include additional years and models. Exactly how much the whole fiasco wound up costing BMW is unknown. However, what is known is that 5,821 fewer cars were sold in Q3 of 2024 compared to the same quarter the previous year. That's millions of dollars in lost revenue. BMW stock prices plummeted from $110.32 in January 2024 to $74.16 by November 2024.
As a further blow, BMW also announced that, for 2025, it would be significantly reducing both its costs and its investments from peak 2024 levels. The company has also seen multiple other leadership changes in 2025 and issued yet another recall in September, this time affecting the engines of nearly 200,000 vehicles. Whether or not even more recalls will happen in the near future is anyone's guess — it's just one of the risks that must be accepted as a part of auto ownership (and as an auto investor, for that matter). But if you are wary of BMW now, the good news is that there are plenty of affordable BMW alternatives that are reliable.