Last month, South Korea’s Hyundai Motor Group announced that it will invest $21 billion in the U.S. over the next four years. In addition to investing $6 billion to build a steel mill in Louisiana, the company will increase its U.S. auto production capacity by 70% to 1.2 million vehicles per year at a cost of $9 billion
The $21 billion investment in the U.S. will be the largest ever made by the Hyundai Motor Group. The investment will be made between 2025 and 2028 and will cover a wide range of fields, including automobiles, steel, parts and energy.
Through all investments, the company will create 14,000 direct jobs in the U.S. by 2028. In the steel industry, Hyundai Steel, a subsidiary of Hyundai Motor, will build its first electric arc furnace steel mill in the U.S. in Louisiana. The plant will have an annual production capacity of 2.7 million tons and will supply steel to the Group’s complete vehicle plants in Alabama and Georgia. The steel mill is expected to create 1,300 jobs annually. In addition to steel for electric vehicles, the investment will include parts and a wide range of materials.
In the automotive sector, the group, which also owns Kia, will invest a total of $9 billion to build a production capacity of 1.2 million vehicles per year in the United States. Hyundai Motor Group’s production volume in the United States in 2024, when final numbers are reported, is expected to be around 700,000 vehicles. The Group is expected to increase this by approximately 70% over the next four years. It will also invest $6 billion in cutting-edge fields such as autonomous driving, AI and robotics, as well as infrastructure-related fields such as small modular reactor (SMR) technology and renewable energy.
Source: The Nikkei
PSR Analysis: This news report was published March 25, but since then the Trump administration has announced a 25% reciprocal tariff rate for South Korea. The South Korean Prime Minister has already had a phone conversation with Trump, but it is still unclear what progress will be made from here. South Korean manufacturers’ exports to the U.S. are growing, and in the five years to 2024, the number of cars imported by the U.S. from South Korea will increase by 60% to 1.36 million. Given that the tariff on South Korean cars exported to the US was previously zero, 25% will have a significant impact. South Korea will want to continue negotiations by pointing out the planned large-scale investment in the US. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
