This May Be Hyundai's Secret Weapon In The EV Wars
For a minute there, it seemed like the Hyundai Motor Group did everything right. It invested early into electric vehicles, used its growing technology advantage to reset perceptions of the Hyundai and Kia brands, and then ramped up huge EV and battery factories in the U.S. to take advantage of tax credits and policies designed to funnel America's car market toward a largely electric future.
The early parts of that plan seemed to pay off. Last year, the Korean automaker's combined three brands came in second to Tesla in U.S. EV sales.
But that was during the endless EV optimism of the Biden years. The Trump administration is taking a very different tack on EVs, de-funding federal money for DC public fast charging, seeking to end EV tax credits and trying to roll back the tough fuel economy and emissions rules driving the electric market. Would a slowing EV segment mean Hyundai's $8 billion U.S. investment is all for naught?
Not quite, the top brass at Hyundai says. That kicks off this Monday edition of Critical Materials, our morning roundup of auto industry and technology news. Also on deck today: the latest word on the street about tariffs and the car business, and why Chinese buyers are going all-in on automotive artificial intelligence. Let's hit it.
30%: Why Hyundai's EV Plan May Just Work Out Under Trump
Okay, Hyundai's Georgia Metaplant isn't exactly a secret. It's a giant, brand-new factory that's over 16 million square feet in size. It will ultimately employ thousands of people to make the updated Ioniq 5 and new Ioniq 9 electric SUVs. More models are expected to be built there over time. That could be all for nothing if the EV market falls off.
But Hyundai Motor's newly appointed global CEO, Jose Muñoz (who was promoted to the top job after running the North American operation) begs to differ. According to Bloomberg, Muñoz said the factory was in the works before Biden became president and before the Inflation Reduction Act was a twinkle in anyone's eye. Moreover, building cars in America with American jobs may insulate the company from headaches around tariffs and such:
Hyundai Motor Co.’s Chief Executive Officer shrugged off uncertainties around President Donald Trump’s approach toward electric vehicles and domestic production, saying the company’s “localization strategy” in the US will “help mitigate the impact of any potential policy change.”
Preparation to add hybrid production is also underway. Hyundai and its partners SK On Co. and LG Energy Solution Ltd. are investing around $12.6 billion in the assembly plant and two battery joint ventures to enable additional capacity.
The shareholder meeting was Munoz’s first as CEO since taking the reins earlier this year. He’s the first foreign national to helm the automaker and fronted a largely Korean crowd.
Production of the Ioniq 5 has been underway at the plant since late last year, but the facility has its official "grand opening" this week. InsideEVs will be there to check it out.
Meanwhile, Hyundai is now expected to increase its U.S. investments by an additional $20 billion, including a steel plant in Louisiana, according to CNBC:
South Korean conglomerate Hyundai will announce a $20 billion investment in U.S. onshoring that includes a $5 billion steel plant in Louisiana, according to people familiar with the plans.
The plant is set to hire roughly 1,500 employees and will produce next-generation steel that will be used by Hyundai’s two U.S. auto plants to manufacture electric vehicles. The investment is expected to be announced Monday at the White House by President Donald Trump, Hyundai Chairman Euisun Chung and Louisiana Gov. Jeff Landry.
In theory, if Hyundai can keep making great EVs in the U.S. with the support of local battery plants (where scale makes everything cheaper over time) it could be positioned to do well without the help of tax credits—and those cars could be far less vulnerable to tariff price hikes than models made in Korea, Mexico, Canada or elsewhere. That exact situation is why many other automakers sweating right now.
If mainstream car buyers choose EVs en masse not because of subsidization but because of the product itself, then Hyundai is probably in a good position here. Also, the factory is due to make hybrids, and nothing indicates those are slowing down.
60%: Tariffs May Not Be Auto-Specific Anymore. Now What?
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No matter what company you are, Trump's threats of tariffs against a wide swath of countries have put the entire auto industry on edge. It's all so deeply interconnected, with parts moving across the Canada- and Mexico-U.S. borders in particular all of the time. Even Tesla, which builds the most American-made vehicles on sale, is getting nervous. Meanwhile, the Trump administration won't admit this, but it's assuredly getting nervous too over the tumbling markets as companies fear for their bottom lines.
For now, it seems like they can breathe a sigh of relief as Trump appears to soften his tariff stance on certain industries—most notably for us, autos. Here's the Wall Street Journal:
The White House is narrowing its approach to tariffs set to take effect on April 2, likely omitting a set of industry-specific tariffs while applying reciprocal levies on a targeted set of nations that account for the bulk of foreign trade with the U.S.
President Trump has declared his April 2 deadline to be “Liberation Day” for the U.S., when he will put in place what is called reciprocal tariffs that seek to equalize U.S. tariffs with the duties charged by trading partners, as well as tariffs on sectors like automobiles, pharmaceuticals and semiconductors he repeatedly said would be enacted on that day.
Those sector-specific tariffs, however, are now not likely to be announced on April 2, said an administration official, who said the White House is still planning to unveil the reciprocal -tariff action on that day, though planning remains fluid.
In other words, the automotive tariffs that may have increased car prices by as much as $12,000 may not happen. Stocks of impacted industries are up today, but as Barron's notes, a ton of uncertainty remains:
Shares of Marvell Technology and General Motors were rising as reports that President Donald Trump might exclude those sectors from new tariffs due to take effect on April 2 lifted semiconductor and auto stocks.
While the news is certainly good for those sectors–those import duties significantly add to the cost of doing business, especially when supply chains are spread across international borders–there’s still plenty of uncertainty about what the White House might do in the future. The short-term changes to policies are still creating some unease.
Did the car industry just dodge a giant bullet? I suppose we'll know more soon enough, but the dust may be far from settled for now.
90%: DeepSeek Wins Over China's Car Buyers
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In-car AI is something many auto brands are promoting right now, but few American buyers really understand. Supposedly, AI will be useful as an assistant that can better understand your voice commands, learn your preferences and routines and customize your driving and ownership experience. With AI being so nascent, it can be hard for us to grasp why any of this would be very useful.
You know who does love this stuff? China's car buyers. And China's AI upstart DeepSeek in particular is an in-demand feature in that market. From Nikkei Asia:
State-owned Dongfeng Motor Group has begun introducing DeepSeek's R1 artificial intelligence model in its Zhiyin SUV from the Voyah line of new energy vehicles, using over-the-air updates. It plans to expand the updates to its M-Hero 917 SUV and other vehicles from April.
The onboard AI assistant can understand and answer questions closer to natural human conversation, Dongfeng said. It can grasp situations using information collected by sensors inside and outside the vehicle to help it understand the intent of the driver's instructions, according to the company.
Connected cars are big in China, and DeepSeek is a rising star in the country's AI sector. DeepSeek garnered global attention for claiming to have achieved performance comparable to generative AI pioneer OpenAI's ChatGPT at lower costs. Its use is spreading in China.
BYD, the leader in electric vehicles, has also announced plans to add DeepSeek-powered features. Other automakers plan to use it in conjunction with different AI models.
Will in-car AI ever get this hot in Western markets?
100%: Which Car Company Can Weather The Tariff Storm The Best?
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It's impossible to know where the Trump administration will take its tariff plans next. But one thing seems certain: car companies who build in America are in far less hot water than those who aren't. Who is positioned well to succeed in this era, especially with electrified vehicles? Let us know what you think in the comments.
Contact the author: patrick.george@insideevs.com
