Hyundai has revised its 2025 operating profit margin target downward from a previously announced 7-8% to 6-7%. The company attributes this adjustment to the financial impact of U.S. tariffs, while simultaneously shifting its strategy to expand production within the United States to mitigate these effects.

According to a report from the Jadeh Makhsous news website, the automaker maintains a positive long-term outlook, forecasting a recovery in its profit margin to 7-8% by 2027 and a further increase to 8-9% by 2030.

A key part of this strategy involves its Georgia plant, which is projected to reach an annual production capacity of 500,000 vehicles by 2028, manufacturing a mix of hybrid and electric models. Following an incident involving the arrest of South Korean workers at the company’s battery plant in Georgia, Hyundai Motor CEO José Muñoz expressed hope that the U.S. and South Korea could find solutions for short-term business travel for specialized workers.

Hyundai announced that by 2025, 40% of the vehicles it sells in the United States will be manufactured domestically. The U.S. market is significant for the company, accounting for approximately 40% of its total revenue.

According to Jadeh Makhsous, Shin Yoon-chul, an analyst at Kiwoom Securities, stated that Hyundai’s plan to produce 80% of the cars it sells in the U.S. locally could help lessen the impact of U.S. tariffs. However, he cautioned that this significant increase in U.S. production could become a fixed cost burden later on, given the uncertainty of whether these tariffs will remain in place.

The automaker also plans to expand its global hybrid vehicle lineup to over 18 models by the end of the decade, an increase from the 14 models announced in 2024. Furthermore, Hyundai will introduce extended-range electric vehicles in 2027 and its first mid-size pickup truck in North America before 2030. The Georgia plant is set to produce a combination of 10 hybrid and electric models.

The tariff situation remains complex. While it was announced that the vehicle import tariff would be lowered from 25% to 15%, Washington recently applied a lower 15% tariff rate on auto imports from Japan, while South Korea still faces a 25% tariff rate for its vehicles.

The financial toll of these tariffs is substantial. Hyundai Motor reported in July that U.S. tariffs cost the company 828 billion won ($606.37 million) in the second quarter of the year, with an even greater impact anticipated for the third quarter.