Hyundai Shifts Tucson Production to U.S., Forms Task Force Amid Tariff Pressure

Hyundai Motor has established a task force to address escalating U.S. auto tariffs, the company announced Thursday. In response to the trade tension, Hyundai has shifted production of some Tucson crossovers from Mexico to its Alabama plant and is evaluating moving U.S.-bound production out of South Korea.

The move follows the Trump administration’s imposition of a 25% tariff on imported vehicles, with auto parts tariffs set to follow by May 3. These measures threaten to raise vehicle prices and reduce car sales, especially for Hyundai and its affiliate Kia, which generate about one-third of their global sales in the U.S., with two-thirds of those vehicles imported.

Hyundai’s task force aims to mitigate the impact of the tariffs and increase U.S. sourcing of components. The company also confirmed ongoing trade talks between South Korea and the U.S., which may lead to a package that removes new tariffs ahead of a July deadline.

To bolster its U.S. presence, Hyundai recently committed $21 billion in new U.S. investments, including expanding its Georgia factory. The Alabama production shift affects about 16,000 Tucsons previously built in Mexico. Hyundai has also frontloaded shipments to the U.S., pushing North American inventory to 3.1 months. Prices on current models will remain unchanged through June 2.

Hyundai posted a record first-quarter operating profit of 3.6 trillion won ($2.5 billion), driven by a weaker won and strong hybrid sales, despite higher incentives and lower SUV sales. U.S. retail sales rose 11% in Q1 as customers bought ahead of expected price hikes.

The automaker is also in ongoing discussions with General Motors on possible collaboration, particularly in response to the shifting tariff landscape, with plans expected to be disclosed soon.