Warranty Week Newsletter Archives

The 21st century of commercial aviation has been dominated by several high-profile warranty problems, from the Boeing 787 Dreamliner delays and 737 MAX groundings, to the Airbus A380 program ceasing. This week, we're taking a look at the history of commercial aviation, and the market conditions and other factors that led to this industry being categorized by extreme periods of warranty costs.

From 2023 to 2024, the total amount the global auto OEMs paid in warranty claims increased by 18%, the total amount set aside in warranty accruals increased by 11%, and the total amount held in warranty reserves increased by 10%. The industry average warranty claims and accrual rates increased as well.

BYD, Nio, Li Auto, and XPeng are increasing their global EV sales. BYD outsold Tesla in the EU in August and September 2025, and is opening factories across four continents. The Chinese EV OEMs' warranty accrual rates are comparable to those of their Western competitors, but their claims rates remain much lower than the global industry average.

Warranty claims costs fell a bit for Hyundai and Kia, but their warranty accruals soared, in the wake of the "park outside" recall of 3.3 million vehicles at the end of 2023. Tata's warranty claims, accruals, reserves, and expense rates all increased from 2023 to 2024.

Honda's claims costs increased in 2024, after increasing warranty accruals in 2023 in response to a large global recall. However, all of the Japanese automakers saw their warranty costs increase in Japanese yen in 2024, due to the devaluation of the yen over the past few years.

GE HealthCare spun off from the parent GE in 2022, and now has the largest total warranty expenses in the U.S.-based medical & scientific equipment industry. This has increased the total warranty costs and expense rates for the X-ray & laser industry sub-group, changing the dynamics of the data for this industry.

In 2024, GPU manufacturer and generative AI leader Nvidia increased its warranty accruals eightfold, doubled its warranty accrual rate, and increased the size of its warranty reserve fund sevenfold. It will be interesting to see where these warranty claims costs arise for Nvidia, since commercial use of its GPUs in data centers voids the product warranty.

2024 was the first year that GE Vernova, formed through the merger of GE Power and GE Renewable Energy, filed a separate annual report from the GE Aerospace and HealthCare divisions. The company reported three years of data, back to 2022. The industry average accrual rates have fluctuated rather dramatically since then, as the new spin-off gets its footing, especially with the warranty costs of its wind turbines.