Hyundai Recalls 568,000 Palisade SUVs Over Defective Airbags

Hyundai has launched its largest recall of the year, affecting more than 568,000 Palisade SUVs over a critical defect in third-row side airbags. Model years 2020 through 2025 are impacted by a failure that prevents proper protection of third-row passengers during side-impact collisions. The NHTSA immediately issued a sales halt order.

"The measured displacement of the ejected test form in the third-row area exceeded the 100 mm performance limit" — National Highway Traffic Safety Administration

This massive recall stems from a routine compliance test failed by a 2025 Palisade. The defect specifically affects third-row side curtain airbags, which are designed to deploy from the roof rail to protect occupant heads during side impacts or rollovers.

A Major Technical Defect Discovered During Testing

The NHTSA uncovered the issue during routine safety checks when a test dummy placed in the third row exceeded permissible displacement limits by 3.9 inches (100 mm). Between April and December 2025, Hyundai and the American regulator conducted extensive compliance testing before confirming the failure of rear curtain airbags.

These airbags normally deploy downward from the roof rail, behind the headliner, to prevent passenger heads from striking windows. In affected Palisades, this protection proves insufficient for rear bench occupants.

Second Recall in Under a Year

This recall affects the exact same vehicle population as a previous September recall tied to seatbelt defects. Palisades from model years 2020 through 2025 now carry two major safety defects within five months.

The redesigned 2026 Palisade generation escapes this particular problem. However, according to Carscoops research, American dealerships still hold hundreds of units from older model years in inventory, now frozen by the sales halt.

What's Next for Owners?

Hyundai is currently developing a fix for this airbag defect but has not yet provided a specific timeline. Once available, the South Korean automaker will contact all affected owners with instructions for scheduling service at their dealership.

Repairs will be entirely free, and Hyundai commits to reimbursing owners for any expenses incurred to correct the issue. Concerned drivers can verify whether their vehicle is affected by entering their VIN on the NHTSA website.

Impact on the Family SUV's Sales Trajectory

The Palisade represents one of Hyundai's best-selling models in the United States. This three-row family SUV had captured its audience through compelling equipment-to-price positioning against premium competitors.

The sales halt temporarily deprives Hyundai of substantial revenue in this lucrative segment. The automaker is betting on the new 2026 generation to reignite commercial momentum, though it must first rebuild consumer confidence following these recurring safety defects.

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