Hyundai Motor Group seeks to overcome US tariff with large SUVs

Hyundai Motor's Palisade SUV / Courtesy of Hyundai Motor

Hyundai Motor and Kia are accelerating efforts to reduce the impact of U.S. tariffs by expanding its lineup of large hybrid SUVs.

Hyundai Motor Group’s three affiliates — Hyundai Motor, Kia and Genesis — are rapidly adding hybrid variants to their profitable, large-size SUV lineups in a bid to counter earnings shocks this year caused by the imposition of a 25-percent tariff on car imports to the U.S.

After Korea and the United States completed their high-profile negotiations late last month, the carmakers’ tariff burden has fallen to 15 percent as of Nov. 1.

In response, the Korean automakers are set to maximize U.S. sales of large hybrid SUVs, which typically offer higher profit margins than smaller cars with internal combustion engines.

Hyundai Motor is poised to increase exports of its hybrid Palisade SUVs on strong U.S. demand. In October, Hyundai Motor America sold 9,549 Palisade SUVs, up 6 percent from the previous year. The carmaker started sales of the hybrid version of the vehicle the same month.

Kia's Telluride SUVs / Courtesy of Kia

Kia also recently launched a hybrid version of its fully-redesigned Telluride SUV, with plans to start U.S. sales in the first quarter of 2026. This marks the first time that the vehicle has been introduced with a hybrid option.

Genesis, the luxury arm of the group, is also set to introduce the first hybrid version of its GV80 flagship SUV in the second half of next year.

Industry officials said launches of highly-profitable large SUVs in the U.S. is well-timed, coming at a critical moment when the carmakers have to defend against lingering tariff burdens in their largest export market.

“The expansion of their hybrid lineups in the U.S. is inevitable, as the Donald Trump administration is moving to reduce subsidies on electric vehicles (EVs) and pushing for policies getting in the way of the growth of the overall EV industry in the U.S.,” an auto industry official said.