Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Hyundai Motor bears brunt of US tariff in 2025 earnings
Hyundai Motor headquarters in Seoul / Yonhap
By Lee Min-hyung
Carmaker set to invest $12.5 bil. for future technologies in 2026
Hyundai Motor’s revenue took a serious hit last year, suffering a double-digit decline in operating profit after continued exposure to the United States’ 25 percent auto tariff.
According to a regulatory filing from the company on Thursday, Hyundai Motor reported an operating profit of 11.47 trillion won ($8.04 billion) in 2025, down 19.5 percent from the previous year. Sales, however, jumped 6.3 percent to 186.25 trillion won during the same period due to the global boom of hybrid cars, the carmaker said.
This enabled Hyundai Motor and Kia — two key auto brands under Hyundai Motor Group — to achieve combined sales of 300 trillion won for the first time last year. Earlier, Kia reported a sharper operating profit fall of 28.3 percent during the same period due to the massive auto tariff set by the world’s largest economy.
“We had a tough year on multiple external uncertainties, such as toughening price competition against Chinese players, the U.S. tariff and global demand slowdown,” a Hyundai official said.
Hyundai Motor paid a total of 4.1 trillion won last year to cover the cost of U.S. tariffs. Together, Hyundai Motor and Kia paid a combined 7.2 trillion won in tariffs in 2025.
The carmakers were exposed to the prolonged tariff shock in the U.S. after the country started imposing a 25 percent auto tariff on imports of Korean cars in April last year. The figure fell to 15 percent in November after Korea and the U.S. reached a belated trade agreement.
Despite the large decline in operating profit, Hyundai Motor painted a rosy picture for the future of its U.S. business, as sales of its hybrid and SUV lineups there remain solid. The carmaker’s U.S. vehicle sales topped the symbolic 1 million mark for the first time last year on the back of its diversified SUV and hybrid models.
The carmaker also strengthened its position as one of the world’s most influential eco-friendly vehicle makers with a diverse powertrain.
According to data from the automaker, its global eco-friendly vehicle sales soared by 27 percent in 2025 from the previous year. Hyundai Motor sold some 635,000 hybrid cars and 275,700 electric vehicles last year.
Hyundai Motor's IONIQ 5 flagship electric SUV / Courtesy of Hyundai Motor
The carmaker said its management outlook for 2026 remains risky and uncertain amid an overall economic downturn in its key overseas markets.
However, it pledged to tackle the complex management risk by focusing on securing future growth engines.
To do so, Hyundai Motor plans to execute some 17.8 trillion won in investment for next-generation core technologies, such as autonomous driving and artificial intelligence.
The investment will also be used to develop more competitive eco-friendly vehicles, such as extended-range electric vehicles (EREVs). EREVs are cars powered by both high-performance batteries and motors.
Lee Seung-jo, executive vice president at Hyundai Motor, underscored the importance of executing continued investment in future technologies.
“This year, we have to keep investing in technologies to secure future tech leadership amid the rapidly changing management environment here and abroad,” he said.
“The auto industry will also face growth slowdown in major markets where competition is expected to deepen.”