Hyundai Makes New Investment in U.S. Manufacturing

Download this article in PDF format.

Last week, Hyundai Motor Group announced a $21 billion investment in the United States over the next three years. The company says the announcement aligns with its own strategic focus on expanding its manufacturing capabilities, advancing future technologies and enhancing energy infrastructure in the U.S. 

This latest U.S. investment builds on Hyundai’s existing allocation of approximately $20.5 billion since entering the domestic market in 1986. “Hyundai Motor Group is deepening its partnership with the United States, reinforcing our shared vision for American industrial leadership,” the company said in a press release. It said the investment and efforts will further expand its operations in the U.S. and grow its American workforce.  

Reinforcing Production Capabilities

To reinforce its production capabilities, Hyundai says it will invest a total of $9 billion to establish an annual production capacity in the U.S. of 1.2 million vehicles across its automotive brands, Hyundai Motor, Kia and Genesis. The company also plans to improve several production facilities and allocate $6 billion to enhance its parts, logistics and steel business, increasing the localization of auto parts and strengthening its global network.

The company also plans to spend $6 billion expanding future industries and strengthening external partnerships and energy infrastructure, including electric vehicle (EV) charging. 

Hyundai Steel will construct an electric arc furnace (EAF) steel mill in the state of Louisiana, capable of producing 2.7 million tons of steel annually. The facility will produce low-carbon steel sheets using the abundant supply of steel scrap in the U.S. with the aim of enhancing the company’s “agility and flexibility in response to external uncertainties,” it added. The automaker expects its total $21 billion investment to create more than 100,000 direct and indirect job opportunities by 2028, including 14,000 direct full-time jobs.

Timing is Everything

Hyundai’s announcement comes at an interesting time for the U.S. manufacturing sector, which is grappling with a litany of challenges this year—including the threat of both new import tariffs and retaliatory tariffs on exports. For example, Reuters says Hyundai Steel's proposed new U.S. steel plant is being viewed as an effort by the company to shield itself from U.S. tariffs on steel and cars, but adds that it’s “not clear whether this will help secure exemptions for Hyundai and South Korea.”

The New York Times says Hyundai already has significant investments in the United States. Last year, the company began producing electric vehicles at a factory near Savannah, Ga. that cost $7.6 billion to build. Along with SK On, a South Korean battery maker, Hyundai is investing another $5 billion to produce electric vehicle batteries near Atlanta.

“The factories provide Hyundai with some immunity from tariffs that the Trump administration has imposed or threatened on steel and cars,” the publication reports. “By reducing Hyundai’s costs from tariffs, the U.S. factories could also give the company a competitive advantage over rivals like Ford Motor and General Motors, which import many of their electric vehicles from Mexico.”

Expanding Capacity

Also last week, Hyundai celebrated the opening of its new $7.6 billion electric vehicle factory in Georgia and announced that it was expanding its production capacity by two-thirds, to a total of 500,000 vehicles per year. The news came as 25% tariffs on auto imports were being announced. 

AP says Hyundai will be “spared from those tariffs on its U.S.-made vehicles,” and that President Trump praised the South Korean automaker, saying its American investments are “a clear demonstration that tariffs very strongly work.”