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Trump tariffs cost Kia $566 million in Q2 earnings

Published: 25 Jul. 2025, 16:45 Updated: 27 Jul. 2025, 16:34

Kia's office in Yangjae-dong of Seocho District, southern Seoul [KIA]

Kia was not spared from the effects of auto tariffs imposed by the administration of U.S. President Donald Trump. The carmaker posted record quarterly revenue in the second quarter of this year, but operating profit plunged more than 24 percent on year due to the impact of the taxes.

The financial damage caused by the tariffs alone exceeded 780 billion won ($566 million), leading the company to miss its double-digit operating margin for the first time since the fourth quarter of 2022.

Kia announced in a regulatory filing Friday that its consolidated revenue had risen 6.5 percent from the previous year to 29.35 trillion won in the April-June period. Operating profit dropped 24.1 percent to 2.76 trillion won.

“The tariffs in the United States affected our bottom line,” a Kia spokesperson said. “But strong sales in key markets, a higher average sale price centered on high value-added models and favorable exchange rates supported our solid profitability.”

Kia sold 814,888 vehicles globally in the second quarter, up 2.5 percent from a year earlier. Domestic sales climbed 3.2 percent to 142,535 units, buoyed by the launch of new models such as the Tasman, a compact pickup, and the EV4.

A Kia EV4 GT-Line is displayed during the New York International Auto Show Press Preview in New York City, U.S., April 16, 2025. [REUTERS/YONHAP]

In overseas markets, Kia grew in most major regions except for Western Europe, where aging export models led to a slight decline despite strong sales of the EV3. In the United States, sales rose 4.1 percent due to the success of the Carnival hybrid and the new K4. In India, the launch of the Syros earlier this year pushed sales up 9.5 percent.

Overseas sales totaled 672,353 units, a 2.3 percent increase on year. Sales of environmentally friendly vehicles led the revenue growth, with 185,000 hybrids and electric vehicles sold — a 14 percent increase from the previous year.

Amid heightened geopolitical risk, global economic slowdown and weakened consumer sentiment, Kia expects tough business conditions to persist in the second half of the year.

To maintain sales momentum, Kia hopes to expand domestic sales of hybrid models such as the Sportage, Sorento and Carnival while building a full EV lineup with the upcoming launches of the EV5 and PV5 in the second half.

In the U.S. market, Kia aims to respond to changing demand and regulatory shifts by operating its production lines more flexibly while increasing the supply of hybrid models of its recreational vehicles, including the Sportage, Sorento and Carnival, to boost profitability. In Europe, where competition in the electric vehicle market is heating up, the company plans to strengthen its position with the third-quarter launch of the EV4 and ramp up sales of electric models such as the EV3, EV5 and PV5.

“We began to feel the effects of U.S. tariffs starting in May,” said Kim Seung-jun, head of Kia’s finance division. “Without that external factor, we would have maintained a double-digit operating margin.” He added, “We expect conditions in the second half to be even more difficult than in the first, but we aim to use this challenge as an opportunity to further strengthen our fundamentals and profit-making capabilities.”

Kia's 2025 EV9, which seamlessly merges functionality with fun, making it an impressive choice for a three-row electric SUV [KIA]

Meanwhile, Hyundai Mobis reported solid second quarter results on Friday.

The company attributed the performance to high value-added electric components, making up a larger proportion of its sales. Consolidated revenue at the Hyundai Motor Group auto parts affiliate rose 8.7 percent from the previous year to 15.94 trillion won during the same period. Operating profit jumped 36.8 percent to 870 billion won. The company cited the ramp-up of its U.S. electrification plant and the expansion of high value-added electric component supply as contributors.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY PARK YOUNG-WOO [[email protected]]