Hyundai Raises Revenue Outlook but Trims Profit Margin Amid U.S. Tariff Squeeze, Sets Stage for New York Investor Day
New York, NY – Hyundai Motor Co., the South Korean automotive giant, unveiled a mixed financial revision for 2025 on Thursday, boosting its revenue growth forecast while dialing back expectations for operating profit margins in a direct nod to escalating U.S. tariffs and heightened investment costs. The adjustments, announced just hours before the company’s inaugural CEO Investor Day in New York City, underscore the precarious balance Hyundai is striking between aggressive global expansion and the harsh realities of protectionist trade policies under President Donald Trump.
In a statement released ahead of the event, Hyundai projected revenue growth of 5% to 6% for the year, a two-percentage-point increase from its January guidance and up from last year’s 175.2 trillion South Korean won ($127 billion). However, the automaker slashed its operating profit margin target to 6% to 7%, down from the previously anticipated 7% to 8%, attributing the hit primarily to “the impact of U.S. tariffs” and accelerated spending to localize production and evade import duties. The company anticipates margins rebounding to 7-8% by 2027 and 8-9% by 2030, signaling long-term optimism despite near-term headwinds.
The timing couldn’t be more charged. Hyundai’s first U.S.-based CEO Investor Day—led by new chief Jose Munoz, who assumed the role earlier this year—arrives amid strained U.S.-South Korea relations, exacerbated by a recent federal raid on Hyundai’s joint battery plant with LG Energy Solution in Ellabell, Georgia. On September 4, Homeland Security Investigations arrested 475 individuals, including about 300 South Koreans, at the $4.3 billion facility, raising questions about labor practices and immigration compliance just as the plant ramps up for electric vehicle (EV) production. The incident, captured in stark video footage of masked agents securing the site, has fueled diplomatic tensions and investor jitters over Hyundai’s American ambitions.
To counter the tariff threats—now at 15% on South Korean auto imports following a July deal that scaled back an initial 25% levy in exchange for Seoul’s $350 billion U.S. investment pledge—Hyundai is doubling down on domestic manufacturing. The company aims to produce over 80% of its U.S.-sold vehicles stateside by 2030, with its Georgia Metaplant expanding to a 500,000-unit annual capacity by 2028, focusing on hybrids and EVs like the IONIQ 5 and IONIQ 9. Currently, 40% of Hyundai’s U.S. sales originate from American factories, a figure the firm is pushing higher to shield against duties that could add thousands to vehicle prices.
Longer-term, Hyundai laid out an audacious 2030 roadmap at the investor day, targeting 5.55 million global annual sales—a 34% jump from 2024’s 4.14 million units—fueled by $77.3 trillion in investments through the decade. The strategy emphasizes EVs, AI integration, and partnerships with U.S. tech firms, alongside a shareholder-friendly Total Shareholder Return policy exceeding 35% from 2025-2027 via dividends, buybacks, and cancellations. Munoz, addressing a room of analysts and executives, framed the tariff turbulence as a “catalyst for innovation,” vowing to “navigate these challenges with agility” while highlighting the firm’s 11% U.S. market share in the first half of 2025.
Yet, the revisions reflect broader industry tremors. Earlier this year, Hyundai front-loaded U.S. shipments to dodge tariffs, warned dealers of potential price hikes starting April 2, and committed $21 billion to American operations—including 14,000 jobs and AI collaborations—to curry favor with the White House. A July profit dip already prompted warnings of deeper tariff bites, with second-quarter operating earnings sliding amid unchanged pricing to absorb costs. Analysts, including those at Bloomberg, note that while U.S.-built models like the Santa Fe and Santa Cruz remain insulated, imported lines from Korea face ongoing pressure, potentially hiking MSRPs by $3,000-$6,000 per vehicle.
As Hyundai’s shares dipped 2% in Seoul following the news, the investor day livestream drew thousands, blending optimism with caution. For the world’s third-largest carmaker by sales—together with affiliate Kia—these moves are a high-stakes bet: Can turbocharged U.S. investments outpace tariff erosion, or will trade wars clip the wings of its EV-fueled ascent? With global rivals like Toyota and Volkswagen eyeing similar pivots, Hyundai’s playbook could redefine how automakers dance with protectionism.
Sources: CNBC, Reuters, Bloomberg, Hyundai official releases, CBT News.