Hyundai Just Took a $1.3 Billion Hit--but a Game-Changing US Deal Could Flip the Script

Hyundai Motor Co. could be turning the corner after a bruising quarter shaped by Washington's tariff drag. The automaker said US duties wiped out around 1.8 trillion won ($1.3 billion) in profit during the third quarter. But a new trade deal between Seoul and Washington could change the calculus. The agreement cuts import tariffs on South Korean vehicles to 15% from 25%, part of a broader $350 billion Korean investment pledge in the US. Hyundai's CFO Lee Seung Jo told investors the deal brings much-needed stability after months of uncertainty. The biggest benefit is that tariff uncertainty has been resolved, he said, noting the company now has a clearer direction after the tension that surrounded its Georgia battery plant and broader trade negotiations.

The company is moving fast to reinforce its US footprint. Hyundai plans to roll out a new Palisade hybrid SUV in the fourth quarter and is considering producing midsize models locally. That comes alongside a record $21 billion investment program through 2028an effort to lift annual US production capacity to 1.2 million vehicles and create roughly 14,000 jobs. Plants in Alabama and Georgia are being expanded, while the company leans into hybrids and locally made EVs to sustain growth in North America. Management expects US EV demand to cool in the near term before picking up again after 2030, while hybrid and electric sales in Europe are projected to stay robust into the late 2020s.

Financially, the latest quarter showed mixed signals. Revenue rose 8.8% to 46.7 trillion won, marking a record for the third quarter, while operating profit slid 29% to 2.54 trillion won. North American sales climbed nearly 13%, helped by strong demand for hybrids, and EV sales in Europe surged 42%. Favorable exchange rates added some lift. In a separate announcement, Hyundai broke ground on a 930 billion won hydrogen fuel cell plant in South Korea, expected to produce 30,000 units annually by 2027. The project reinforces Hyundai's broader ambitionto hedge across multiple energy platforms while steering through one of the most complex trade landscapes it has faced in years.