Hyundai Motor Company is reportedly postponing the launch of its cutting-edge hypercasting production facility at the Ulsan plant, a project originally backed by a ₩1 trillion (approx. $730 million) investment. The decision comes in response to weakening global electric vehicle (EV) demand and the United States’ recent imposition of a 25% import tariff on foreign automobiles.
Hypercasting Project Pushed to 2028
According to Seoul Economy in the automotive industry on May 10, Hyundai is in discussions to delay the mass production start of its hypercasting facility from 2026 to 2028. This adjustment is being negotiated with the labor union at the Ulsan plant, following talks that began late last year.
Hypercasting is a next-generation manufacturing technique where molten aluminum is injected into a large mold under high pressure to create entire vehicle bodies in a single step. This process significantly improves manufacturing efficiency by reducing the number of components and minimizing quality issues in welding and assembly. Tesla’s similar “gigacasting” technique has been shown to lower production costs by around 40%.
EV Market Uncertainty and U.S. Tariffs Trigger Reassessment
Hyundai’s reevaluation of its investment strategy reflects growing concerns in the EV market, often described as entering a temporary “demand chasm.” Adding to the uncertainty is the U.S. government’s decision to enforce a 25% tariff on imported vehicles—a significant blow to Hyundai and Kia, which exported over 1 million vehicles to the U.S. from South Korea in 2024 alone.
The financial burden from the new tariff is substantial. Industry analysts estimate that it could increase the cost per exported vehicle by roughly ₩8 million (approx. $5,900), potentially amounting to an overall hit of ₩8 trillion (approx. $5.9 billion). This would account for nearly 30% of Hyundai and Kia’s combined operating profits from last year.
Strategic Pivot to U.S.-Based Production
Despite the financial strain, Hyundai and Kia cannot afford to retreat from the U.S. market, which remains their largest, surpassing domestic sales. To minimize tariff exposure, the Hyundai Motor Group is now accelerating its shift toward localized production in North America.
The group has announced plans to invest over ₩12.66 trillion (approx. $9.3 billion) into expanding its U.S. operations over the next four years. With the addition of the Metaplant in Georgia—which has a production capacity of 300,000 units—Hyundai’s total U.S. output has risen to 1 million vehicles annually. The company aims to further expand this to 1.2 million units by increasing Metaplant’s capacity to 500,000 units.
Short-Term Adjustments and Global Sales Revisions
In light of the new market conditions, Hyundai and Kia are making several tactical changes. Kia recently revised its global sales target for 2030 from 4.3 million to 4.19 million vehicles. Hyundai has also announced a 3% price hike in India and plans to end its free maintenance service for new car buyers in the U.S. by the end of 2025.
Meanwhile, Hyundai Motor President José Muñoz stated there are no immediate plans to raise U.S. prices—but noted the current pricing structure would hold only until June 2. Nevertheless, analysts at Goldman Sachs predict U.S. vehicle prices could rise between $5,000 and $15,000 (approx. ₩735 million to ₩2.2 billion) depending on the tariff’s duration.