Hyundai Motor to invest record $16.6B in South Korea

The Hyundai company logo is displayed Sept. 12, 2021, in Littleton, Colo. Hyundai has joined Honda and Toyota in raising factory worker wages after the United Auto Workers union reached new contract agreements with Detroit automakers. Hyundai said Monday, Nov. 13, 2023 that it will raise factory worker pay 25% by 2028. (AP Photo/David Zalubowski, File)

Seoul, South Korea — South Korea’s Hyundai Motor Group said Thursday it plans to make a record $16.6 billion investment in the country, boosting EV and AI development, as it navigates geopolitical challenges and uncertainties.

The world’s third-largest carmaker has been confronted with tough competition abroad, as US President-elect Donald Trump’s second term is expected to bring higher tariffs.

Domestically, it is struggling with sluggish demand, which has been exacerbated by ongoing political turmoil stemming from the brief martial law decree issued by impeached President Yoon Suk Yeol last month.

READ: Hyundai to invest more than $50B in major EV push in South Korea

The 24.3 trillion won ($16.6 billion) investment plan represents a more than 19 percent increase from last year’s 20.4 trillion won, the group said in a statement Thursday.

The decision to “carry out the largest investment in South Korea this year stems from the belief that continuous and stable investment is essential to overcome crises and secure future growth drivers in an increasingly uncertain environment”, it added.

The planned investment encompasses 11.5 trillion won allocated for research and development in next-generation products, as well as hydrogen-powered technologies and electrification, Hyundai said.

The firm said it will also invest 12 trillion won in general investments aimed at expanding electric vehicle (EV) production and developing new models.

The investment plan is “expected to contribute to the revitalisation of the (South Korean) economy and the advancement of related industries”, it said.

Around 800 billion won will be spent on strategic investments, including for autonomous driving and artificial intelligence, it added.

To support this effort, Hyundai intends to establish a facility at its domestic production site in the city of Ulsan, dedicated to its innovative “hypercasting” manufacturing process for EVs.

Hyundai, along with other major carmakers, is following Tesla’s “Gigacasting” technology, which involves producing significant vehicle sections as large, single components, thus streamlining production and reducing costs.

In the United States, incoming president Trump has said he would impose universal 10 percent tariffs on imported goods.

The South Korean automaker started production at a $7.6 billion plant factory in the US state of Georgia last year to make its vehicles eligible for tax credits under the incumbent administration, but Trump has said he would scrap it.

Hyundai Motor shares closed down 0.23 percent in Seoul on Thursday.