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Hyundai, Kia U.S. sales grow but profits shrink due to tariffs

Published: 02 Oct. 2025, 15:16

Robots make the Ioniq 5 SUV at the Hyundai Motor Group Metaplant America, which officially opened on March 26 in Bryan County, Georgia. [HYUNDAI MOTOR]

Hyundai Motor and Kia achieved record-high quarterly sales in the United States in the third quarter this year, buoyed by strong demand for electric vehicles (EVs) and sport utility vehicles (SUVs). However, profitability is expected to decline due to steep import tariffs.

Combined sales in the U.S. market during the third quarter reached 239,069 units, up 13 percent year-on-year, marking the highest quarterly figure to date, according to the automakers Thursday. In September alone, Hyundai sold 71,003 vehicles while Kia sold 65,507, rising 14 percent and 11 percent, respectively, compared to the same month last year.

EV sales played a key role in driving the record-breaking performance. Despite the expiration of federal tax credits for Hyundai’s EVs, the automaker slashed the price of its Ioniq 5 model by as much as $9,800. For the 2025 model year, Hyundai also introduced a $7,500 cash incentive to entice consumers.

As a result, the Ioniq 5 hit a monthly sales record in the United States, and Hyundai’s total EV sales in the market soared 135 percent year-on-year. Kia also saw record-breaking third-quarter sales, bolstered by the popularity of its SUV lineup, including the electric EV9.

While volume and revenue climbed, analysts expect operating profit to fall. According to financial data tracker FnGuide, the combined third-quarter operating profit consensus for Hyundai and Kia is projected at 5 trillion won ($3.57 billion), down 21.3 percent year-on-year.

Excluding the third quarter of 2022 — which reflected costs related to the Theta II GDI engine quality issue — this would mark the lowest quarterly profit in three years. Hyundai is forecast to post 2.67 trillion won and Kia 2.41 trillion won in operating profit, representing respective declines of 25.3 percent and 16.4 percent compared to the same period in 2024.

Hyundai Motor Group Chair Euisun Chung speaks at the completion ceremony for the new Metaplant America (HMGMA) plant in Georgia on March 26. [HYUNDAI MOTOR GROUP]

The main culprit is the high tariff rate imposed by the U.S. government. Since April, Washington has applied a 25 percent tariff on imported Korean-made vehicles. Although the two governments agreed in July to lower the rate to 15 percent, the policy has yet to take effect.

Hyundai and Kia are estimated to have incurred a combined tariff loss of 2.45 trillion won in the third quarter — 1.25 trillion won for Hyundai and 1.2 trillion won for Kia, according to NH Investment & Securities. This marks an increase of 800 billion won from the second quarter, when pre-tariff inventory helped mitigate the impact.

To counter the blow to profitability, Hyundai Motor Group is accelerating efforts to expand local production in the United States. In addition to operating plants in Alabama and Georgia, the group launched production at Hyundai Motor Group Metaplant America (HMGMA) earlier this year to strengthen its manufacturing footprint.

With HMGMA included, Hyundai Motor Group has established an annual production capacity of 1 million units in the U.S. The group plans to expand HMGMA’s current output capacity of 300,000 units to 500,000. At the CEO Investor Day in September, Hyundai also revealed a mid-to-long-term strategy to raise the proportion of U.S. production and local parts sourcing to 80 percent by 2030.

BY PARK YOUNG-WOO [[email protected]]