L87 Engine Failures Keep GM Under Regulatory and Cost Pressure

U.S. legacy automaker, General Motors GM, is facing growing engine trouble that has caught the attention of federal safety regulators and many vehicle owners. The company’s L87 6.2L V8 engine has reportedly failed again, even after receiving the manufacturer’s prescribed fix. This engine is used in some of the company’s best-selling trucks and large SUVs, including the Chevrolet Silverado 1500, GMC Yukon and Cadillac Escalade.

In April 2025, GM recalled covering about 721,000 vehicles globally over engine issues. Nearly 600,000 of those (2021-2024) model year trucks and SUVs in the United States are equipped with the 6.2L L87 engine, under recall number 25V-274.

The recall was meant to address a serious internal issue, including manufacturing defects in connecting rods and crankshafts that could fail and lead to sudden engine seizure. These problems could lead to bearing damage, engine seizure, or even a connecting rod breaking through the block.

GM’s recall remedy involved a two-step process. Technicians were instructed to inspect the engine and replace it entirely if damage was found. If the engine passed inspection, technicians were instructed to drain the oil and refill it with thicker 0W-40 oil, install a new oil cap and update the manual guidance. The thicker oil was intended to give better protection inside the engine to compensate for the defects.

As of January 2026, 36 vehicle owners have complained, stating that their vehicle engines failed even after being inspected and fixed under the recall. After these new concerns, the National Highway Traffic Safety Administration (“NHTSA”) has opened a recall query, RQ26001, specifically to investigate these concerns and check whether the earlier solution was adequate or not. 

NHTSA is also assessing reports of sudden engine failures, including incidents in which drivers lost power on the highway at normal speeds, leaving them stranded or in dangerous situations.

The continued failures following the recall have raised broader concerns. In addition to the new investigation, there are ongoing engineering analyses into L87 engine failures in vehicles that weren’t part of the original recall range.

A class-action lawsuit has also been filed, arguing that the recall caused confusion and that the solution to the fix might not be enough to prevent future problems.

Overall, the continued failure of the L87 engine has raised serious questions about the effectiveness of the remedy. With federal regulators now re-examining the issue, GM faces increasing pressure to provide a permanent solution and restore consumer confidence.

Competitive Context

Rivian Automotive, Inc. RIVN, a California-based electric vehicle manufacturer, is recalling 19,641 R1 vehicles that were previously serviced for a rear suspension issue. According to NHTSA, Rivian will replace the rear toe link bolts using its updated procedure at no extra cost to owners. The recall applies to certain R1 models from the 2022-2025 model years, including 7,031 R1S SUVs and 12,610 R1T pickup trucks. All affected vehicles underwent rear suspension service between April 1, 2022, and March 10, 2025.

In December, U.S. legacy automaker Ford Motor Company F recalled more than 272,000 hybrid and EVs due to a software issue affecting the Integrated Parking Module (IPM). According to NHTSA, the integrated park module may fail to lock into the park position when the driver shifts into park. The loss of the parking function can cause the vehicle to roll away, increasing the risk of a crash. The recall affected 2022 -2026 F-150 Lightning models, 2024-2026 Mustang Mach-E models, and 2025-2026 Maverick models. 

The Zacks Rundown on GM Stock

Shares of GM have gained 51.9% in the past six months compared with the industry’s growth of 33.6%.

From a valuation standpoint, GM trades at a forward price-to-sales ratio of 0.41X, down from the industry and its own five-year average. It carries a Value Score of A.

See how the Zacks Consensus Estimate for GM’s earnings has been revised over the past 90 days.

GM stock currently sports a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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