General Motors is putting its chips back on internal combustion. The automaker has announced an $888 million investment in its Tonawanda Propulsion plant in Buffalo, New York. This reportedly shelves a late 2023 plan that committed $300 million toward EV drive units at the same site. The new money will fund production of GM’s sixth-gen small block V8 engine, which will power the company’s full-size trucks and SUVs starting in 2027.

This marks the largest single investment GM has ever made in one of its engine plants

It also makes Tonawanda the second facility tapped to build this next-gen V8, after a $500 million commitment last year to the Flint Engine plant in Michigan. GM leadership said in a press release that the Tonawanda move reflects a strategic focus on keeping its most profitable vehicle lines competitive, especially as demand for electric vehicles cools off from earlier industry projections.

The announcement also comes in the midst of broad consumer concern over GM’s 6.2L L87 V8. The unit is under recall, citing sudden, premature failure due to defective rod bearings and/or crankshaft components.

The new V8 promises to deliver better fuel efficiency and lower emissions without sacrificing the performance that truck and SUV buyers expect

GM engineers are leaning on new combustion techniques and thermal management upgrades to get there. While it’s not a pivot away from electric altogether, it is a reminder that GM’s all-electric future might take a little longer to arrive than originally advertised.

Tonawanda, a plant with 87 years under its belt, will continue to produce the current fifth-gen V8s as it ramps up for sixth-gen production. Local leadership said the investment represents a major win for the plant’s nearly 900 workers and the surrounding Western New York community. The state of New York is pitching in with nearly $17 million in tax credits to help secure the deal and preserve 177 jobs that were previously on the chopping block.

This isn’t just a reallocation of funds…it’s a change in tone

GM had previously earmarked the plant for electric powertrain production, a plan that looks like it’s now been quietly retired. The timing aligns with GM’s recent resistance to stricter EV mandates and comes amid industry-wide recalibration as consumer appetite for EVs continues to plateau.