Hyundai Hit by U.S. Tariffs: Hyundai Motor has cautioned that U.S. tariffs will keepimpacting its financial results this year, following the South Korean automaker’sreportof a disappointing 40% decline in operating profit for the fourth quarter.
During the OctobertoDecembertimeframe, Hyundai reportedan operating profit of 1.7 trillion won ($1.19 billion), notablylowerthan the 2.7 trillion won prediction by LSEG SmartEstimate. The findingsemphasizeincreasingstrain on the carmanufacturerduetoescalating trade expenses and decliningworldwide demand
Tariffs and EV Incentives Hit Earnings
Impact of U.S. Trade Policy
Hyundai reportedthat its profits were significantlyimpacted by U.S. tariffs on imported cars, which were initiallyimposed at 25% during President Donald Trump’s administration in April. Eventhough the tariff rate was lowered to 15% in November after a trade agreement with South Korea, the economiceffectcontinued to besignificant.
The firmstated that tariffs ledto a 4.1 trillion won loss in 2025, significantlysurpassing the 1.7 trillion won advantagereceived from a depreciated local currency
Besides tariffs, heightened sales incentives in the U.S. electric vehicle market further reduced profitability. Hyundai increased discounts to lower EV stockafter the U.S. EV subsidies ended last year, puttingadditionalstrainon margins.
This signifies Hyundai’s third straight quarterly dropinprofits
Company Sees Tough Global Market Ahead
Industry Growth Remains Stagnant
Hyundai stated,“Difficult global market conditions are anticipated to persist this year,” pointing to slow industry growth and increasing competition, especially in developing markets.
Earlier this week, President Trump cautionedaboutpossible tariff increases on vehicles and other imports from South Korea, pointingtoholdups in executing the trade deal—introducing further ambiguity for automakers
Hyundai Plans Higher Spending to Offset Tariff Impact
Capital Investment to Rise Sharply
In response to the impact of tariffs, Hyundai intends to hikeits capital expenditure by almost 30% to 9 trillion won by 2025. The extra investment will supportincreased production capacity in the United States, lesseningdependence on imports.
In spiteofexistingdifficulties, Hyundai seeks to enhance its operating profit margin to arangeof 6.3% to 7.3% this year, increasing from 6.2% in 2024, through
Boosting vehicle shipments
Increasing sales of higher-end models
Hyundai, together with affiliate Kia, remains the world’s third-largest automaking group by global sales.
Hyundai Hit by U.S. Tariffs as Fourth-Quarter Profit Falls 40%
Shares Rise on Robotics and Automation Ambitions
Strong Stock Performance
Despite weaker earnings, Hyundai shares jumped 7% on Thursday and are up nearly 70% so far this year, far outperforming South Korea’s broader market, which has gained 22%.
Investor optimism has been fueled by:
Plans to deploy humanoid robots at factories starting in 2028
A goal to build a facility capable of producing 30,000 robot units annually
Earlier reductions in U.S. auto tariffs
Competition Heats Up in Robotics
Hyundai’s AmericancompetitorTeslaalsorevealedonThursdaythatitplanstodoubleitscapitalexpenditurethisyear,concentratingonfullyautonomousvehiclesandhumanoidrobots. Nonetheless,Tesla’sCEOElonMuskwarned that theinitialproductionofits humanoid robot,Optimus, would be“painfullyslow.”
Conclusion
Hyundai isunderongoingstrain from U.S. tariffs, decelerating global growth, and fierce competition, yet the automaker is wagering on increased investment, sales of premium vehicles, and cutting-edge robotics to safeguard margins and promote long-term expansion. Despiteongoing short-term challenges, investor confidence indicatesthat markets are prioritizing Hyundai’s future technologies overimmediate profit fluctuations
What Do You Think?
Q: Can Hyundai’s heavy investment in robotics and U.S. production help it overcome rising trade barriers and global market pressures?
Khushal Bhatia is a business news writer and a BBA student with a keen interest in the economy and financial systems. Driven by curiosity and a desire to understand how markets and policies shape businesses, he focuses on breaking down economic trends and corporate developments in a clear, engaging way. Khushal believes continuous learning is essential for long-term growth, and through his writing, he aims to help readers navigate the fast-changing business and economic landscape with better insight and confidence.
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