{"id":83679,"date":"2025-09-15T11:03:06","date_gmt":"2025-09-15T15:03:06","guid":{"rendered":"https:\/\/autosector.com\/?p=83679"},"modified":"2025-09-15T11:03:06","modified_gmt":"2025-09-15T15:03:06","slug":"hyundai-kia-tariff-ice-china","status":"publish","type":"post","link":"http:\/\/autosector.com\/?p=83679","title":{"rendered":"Hyundai And Kia Just Can’t Win Under Trump"},"content":{"rendered":"

The last time I was in South Korea for a work trip<\/a>, I took some extra time to explore Seoul a bit. One thing that struck me while I was there was the generally positive view<\/a> many people had of the United States.<\/p>\n

I’m sure that’s not a universal opinion, of course. But I met several people who said they think highly of the U.S. as the friends who came to their rescue during their devastating civil war, as a crucial trading partner, and as an ally they’re glad has their collective backs with China right in their backyard.\u00a0<\/p>\n

I have to imagine their view of the U.S. is one of bewilderment today. To understand why, look no further than the challenges the Hyundai Motor Group is currently enduring as policy shifts and immigration crackdowns rattle its largest American investment to date and future plans to expand here.<\/p>\n

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That kicks off today’s Critical Materials<\/strong><\/a>, our morning roundup of industry and technology news. Also on deck today: Elon Musk says “thank you” by buying a ton of Tesla stock, and the electric Volkswagen Golf may not arrive on time. Let’s dig in.<\/p>\n

<\/svg><\/span>30%: Hyundai ‘Stuck In Limbo’ As Trade Negotiations Stall<\/h2>\n
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Hyundai Metaplant<\/p>\n<\/div>\n

Photo by: Patrick George<\/p>\n<\/section>\n

It does feel like the Hyundai Motor Group did everything it was supposed to do, and it’s still getting burned.<\/p>\n

The U.S. is Hyundai’s largest and most important global car market. To capitalize on its success here, it spent almost a decade building the new Metaplant in Georgia<\/a> to bring electric vehicle, hybrid and battery production stateside. It’s supposed to bring more\u00a0than 100,000 jobs for related industries and projects and cement Hyundai’s presence in America as a long-term one.<\/p>\n

Yet in recent weeks, it was the site of one of the largest immigration raids in U.S. history, inflaming tensions with South Korea. It may lead to a reset on how the country issues visas for the short-term skilled workers needed to scale up high-tech factories and train workers, but in the meantime, it will mean battery production delays at the plant<\/a>. That’s problem one.<\/p>\n

Problem two: tariffs. The U.S. has set a 25% duty on\u00a0Korean vehicles, and right now, Korean government officials are working to bring that number down\u2014though discussions reportedly stalled out this weekend<\/a>.\u00a0<\/p>\n

Until that gets resolved, Hyundai and Kia are uniquely exposed to high costs even as they’ve both worked to ramp up U.S. production in recent years. From The Korea Times<\/em><\/a>:\u00a0<\/p>\n

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Hyundai Motor and Kia are particularly exposed to the risk of losing price competitiveness to their Japanese counterparts, as the U.S. is scheduled to lower its auto tariff on Japanese cars to 15 percent starting Sept. 16, following a Washington-Tokyo deal.<\/p>\n

Korea\u2019s trade negotiations with the U.S. are\u00a0stuck in limbo\u00a0amid unresolved details over the operation of a $350 billion U.S. investment fund. During a Sept. 9 seminar in Seoul, presidential chief of staff for policy Kim Yong-beom said, “We cannot rush tariff negotiations just to narrow the gap in auto industry tariffs, because $350 billion would deal too great a shock to our entire economy.”<\/p>\n

According to data from market tracker FnGuide, Hyundai Motor is forecast to suffer an operating profit fall of 10.4 percent between July and September from the previous quarter. Kia\u2019s operating profit fall was also revised to 9.5 percent due to the U.S. tariff.<\/p>\n<\/blockquote>\n

The Korean automaker has experienced a good amount of tariff whiplash under the second Trump administration.\u00a0In July, Trump said the U.S. would charge a 15% tariff on imports from South Korea, down from a threatened 25%, in exchange for that country’s plans to invest $350 billion in the United States. But that tariff cut hasn’t been finalized yet, according to reports<\/a>, as the two countries remain at odds over the details of the investment deal.\u00a0<\/p>\n

Hyundai and Kia have not announced plans to raise prices on vehicles yet, and they may not. But in the meantime, as they bear the burden of the tariff costs, they’re going to take a serious profit hit;\u00a0$1.15 billion in the second quarter of this year alone. And while the Trump administration is eager to get more Koreans buying American-made cars, it’s unclear if U.S. automakers (besides Tesla, which is the top “import” brand there<\/a>) can even make what Koreans want to buy and drive.\u00a0<\/p>\n

Hyundai Motor will host its annual investor presentation in New York this week. Expect more news then, surely.<\/p>\n

<\/svg><\/span>60%: Elon Musk Buys $1 Billion In Tesla Stock<\/h2>\n
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Tesla’s board has decided to make CEO Elon Musk its trillion-dollar man<\/a>, provided he can put millions of autonomous cars on the road and millions of humanoid robots to work wherever they’re needed. It’s an outlandish and unprecedented pay package tied to an\u00a0outlandish and unprecedented set of goals<\/a>, but hey\u2014he’s a genius and I’m not.\u00a0<\/p>\n

To say thanks and to apparently reaffirm his commitment to Tesla, Musk this weekend bought about $1 billion worth of shares, sending $TSLA prices to almost their highest levels of the year, as of this writing. More from Bloomberg<\/em><\/a>:\u00a0<\/p>\n

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Musk, 54, last bought Tesla stock in the open market in\u00a0February 2020, according to data compiled by Bloomberg. The chief executive officer offloaded more than $20 billion of the company\u2019s shares in 2022, the year he acquired Twitter.<\/p>\n

The purchase amounts to a show of confidence in Tesla\u2019s prospects after a challenging first half of the year in which vehicle sales\u00a0slumped 13%\u00a0worldwide. While Musk has talked up Tesla\u2019s pursuit of robotaxis and humanoid robots, he\u2019s also cautioned that the company could be in for \u201ca few rough quarters\u201d after the US phases out electric-car purchase incentives at the end of this month.<\/p>\n<\/blockquote>\n

When Musk plans to show more of a roadmap for Tesla than a brief X post<\/a> that many have likened to AI slop is currently unclear.\u00a0<\/p>\n

<\/svg><\/span>90%: Volkswagen May Push Back Electric Golf As It Assess Production Plans<\/h2>\n
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Volkswagen ID. Cross Live Photos<\/p>\n<\/div>\n

Photo by: Patrick George<\/p>\n<\/section>\n

Volkswagen had a pretty strong electric-vehicle showing at IAA Munich last week\u2014for Europe, anyway. An affordable electric small crossover<\/a> is coming and so is the related electric ID. Polo<\/a>. But the big guns someday will be the ID. Golf<\/a>; VW can’t afford to get that one wrong. And as it sorts out various production issues, that may not hit the road until the end of this decade. Here’s Automotive News<\/em><\/a>:<\/p>\n

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The plan to retool VW\u2019s Wolfsburg factory for next-generation electric vehicles has stalled due to budget constraints, pushing back the launch of the electric Golf by around nine months, the people said, asking to remain anonymous discussing confidential information.<\/p>\n

Plans to move production of the existing combustion-engine Golf to Mexico have been delayed as a result, they added. The timing of the launch of the electric version of the T-Roc has also been affected, one of the people said. VW declined to comment.<\/p>\n

Pushing back the battery-powered Golf, which was expected in 2029, gives Chinese rivals led by BYD more time to accelerate their European expansion and grab more of VW\u2019s market share in the region.<\/p>\n<\/blockquote>\n

Meanwhile, plans for future EVs in America remain less clear than ever<\/a>.\u00a0<\/p>\n

<\/svg><\/span>100%: Will Hyundai Press On With EVs?<\/h2>\n
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Hyundai Ioniq 6 N Top<\/p>\n<\/div>\n

Photo by: Hyundai<\/p>\n<\/section>\n

Of all the so-called “legacy” automakers, the Hyundai Motor Group has executed one of the finest EV strategies in the business. It’s got a full lineup of electric cars with impressive range, specs and prices, and it’s due to add more affordable models soon. But we can’t discount the impact of tariffs on its plans, even if Korea makes a better deal with the U.S. than what’s in place now.<\/p>\n

Do you see Hyundai Motor backing off its ambitious EV plans to focus on hybrids, or is it smarter to press on while other rivals go back to gas? Let me know your theories in the comments.<\/p>\n

Contact the author: patrick.george@insideevs.com<\/a>.<\/em><\/p>\n

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