Hyundai bets big on steel to anchor US strategy

Hyundai Motor Group is betting on steel to expand its manufacturing footprint in the United States, in a strategic move to build a local supply chain that serves not just the automotive industry, but also robotics, aerospace and artificial intelligence (AI) data centers.

At the groundbreaking ceremony Friday (local time) for a $5.8 billion electric arc furnace steel mill being jointly constructed by Hyundai Steel and POSCO in Louisiana, Hyundai Motor Group Executive Chair Chung Euisun said the facility will become a key production hub for supplying low-carbon, high-grade steel to a broad range of advanced industries in the U.S.

The strategy marks a major shift from viewing the mill as a way to shield Hyundai Steel's U.S. operations from the 50 percent tariff on imported steel. Instead, the group plans to use the facility as a foundation for expanding its manufacturing value chain in the world's largest economy.

Chung said the plant will begin producing steel in early 2029, supplying automotive sheets as well as materials for humanoid robots, AI data centers, power-generation facilities and aerospace applications.

“Hyundai-POSCO Louisiana Steel (HPLS) will be the first dedicated automotive steel sheet mill in the U.S. based on an electric arc furnace, and it is also a first for Hyundai Steel," Chung said at the ceremony.

"By combining direct reduced iron and electric arc furnace technologies, we will produce premium low-carbon steel, which will be used for next-generation mobility by Hyundai Motor and Kia, as well as other automakers, and for AI data centers and power-generation facilities," he said.

Chung also pointed to potential demand from Hyundai Motor Group's robotics business and the U.S. space industry.

"We will, of course, apply high-value-added steel produced at the HPLS electric arc furnace mill to our humanoid robot, the Atlas," he said. "In the future, I hope we can also supply it to SpaceX or for rockets."

The remarks underscore Hyundai's ambition to tap into growing demand for high-value steel generated by America's expanding advanced manufacturing industries, rather than relying solely on the automotive sector.

The HPLS project is the first major initiative to move forward under Hyundai Motor Group's U.S. investment plan, which was announced by Chung at the White House in March 2025 and finalized at $26 billion in August the same year.

The facility is expected to produce 2.7 million tons of steel annually, including 1.8 million tons of automotive steel — enough to manufacture roughly 2.7 million vehicles — and 900,000 tons for general applications.

Hyundai Motor Group will hold an 80 percent stake in the project, including Hyundai Steel's 50 percent, Hyundai Motor's 15 percent and Kia's 15 percent, while POSCO will own the remaining 20 percent.

"This is not simply a plant investment," Chung said. "It is an investment in strengthening America's manufacturing leadership and in the local community of Louisiana."

Louisiana Governor Jeff Landry, a prominent ally of U.S. President Donald Trump who has also been tapped as the administration's special envoy to Greenland, welcomed the project, saying Hyundai Steel's investment would create quality jobs and provide new opportunities for local businesses.

The project is expected to give Hyundai and Kia greater flexibility in sourcing steel locally, while strengthening their ability to respond to trade barriers and rising demand for locally manufactured products.