General Motors is under fresh regulatory pressure after the U.S. National Highway Traffic Safety Administration opened a recall query into approximately 597,571 vehicles equipped with L87 V8 engines. This action follows reports of engine block cracks and coolant leaks that persisted even after GM’s initial recall fix. Internal GM documents indicate warranty costs for the L87 engine defect have already surpassed $150 million in the past six months, and the company has set aside an additional $75 million for potential future claims. The NHTSA’s Preliminary Evaluation, now underway, will assess whether GM’s remedy is sufficient or if a full-scale safety recall is required. Investors should watch for possible fines or expanded repair campaigns, which could add further pressure on GM’s service and overhead budgets in the current fiscal year.

Despite external headwinds from shifting trade policies, tariff changes and the elimination of the federal EV tax credit, GM closed 2025 with a 6% year-over-year increase in U.S. retail deliveries, leading the domestic auto market. Chevrolet Silverado and GMC Sierra pickups delivered their strongest combined annual result in two decades, extending GM’s leadership in full-size truck sales for the sixth consecutive year. All four GM brands posted gains: GMC set a second consecutive annual record, Cadillac achieved its best volume in ten years, and GM secured its 51st straight year atop the full-size SUV segment. Notably, GM also ranked as the second-best-selling EV brand nationwide. The company moved nearly 700,000 Chevrolet and Buick units priced below $30,000, underscoring GM’s strategy to capture entry-level buyers while maintaining incentive spending roughly 20% below the industry average, supporting healthier gross margins heading into 2026.