Hyundai investment in US to reach $21B, boost localization efforts

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Hyundai Motor Group (HMG) is among the first automakers to announce a major investment into US manufacturing in the wake of US President Donald Trump’s aggressive tariff stance. The automaker has outlined plans to invest US$21 billion between 2025 and 2028 into a variety of projects. Hyundai’s investment in the US will create more than 100,000 direct and indirect job opportunities by 2028 and 14,000 full-time jobs, HMG estimates.

The US investment plan, which was announced alongside President Donald Trump at a press conference on March 24 in the White House, is essentially split into three tranches. Around US$9 billion is for vehicle manufacturing; US$6 billion is to “enhance parts, logistics, and steel business” to increase localization; and US$6 billion is to “expand future industries and strengthen external partnerships and energy infrastructure.”

Amongst the plans includes increasing US production capacity to 1.2 million units annually. HMG officials stated that the investment would support operations of all three of the group’s brands, Hyundai, Kia and Genesis. They also said the group plans to “invest in improving its production facilities, including Hyundai Motor Manufacturing Alabama and Kia Autoland Georgia, to further enhance its customer-centric approach in delivering high-quality automobiles.”

However, HMG did not give any detail on how much of the US$9 billion vehicle manufacture investment will be spent on this aspect. It has also not committed to production volumes, which will likely be dependent on market conditions once completed. 

HMG also took the opportunity to lay out its broad plans to increase parts localization. The US$6 billion that will be invested will “form an auto cluster following expansion of the Group’s production facilities, as well as strengthening Group logistics to ensure robust supply chains and investing in steel production in the US.”

Hyundai’s investment in the US includes an amount being spent by affiliate Hyundai Steel, which will build an Electric Arc Furnace (EAF) steel mill in Louisiana. Capable of producing 2.7 million tons of steel annually, including low-carbon steel sheets from locally available steel scrap, it has said that is being built with “the aim of enhancing the Group’s agility and flexibility in response to external uncertainties.”

This may help HMG increase the amount of US-sourced steel it uses and reduce its exposure to the 25% tariff on steel imported into the US from any country.