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Palisade recall after fatal accident estimated to cost Hyundai Motor 100 billion won

Published: 16 Mar. 2026, 14:30 Updated: 16 Mar. 2026, 14:42

Hyundai Motor's Palisade [NEWS1]

Hyundai Motor's recent recall of the 2026 Palisade model is estimated to cost the company as much as 100 billion won ($66.8 million). The company has halted domestic and overseas sales of the model following a fatal accident in the United States earlier this month.

“Given that the current market consensus for Hyundai Motor’s annual operating profit in 2026 stands at 12.9 trillion won, recall costs of around 100 billion won amount to only 0.8 percent, so the impact on the share price is likely to be limited," Kim Joon-sung, an analyst at Meritz Securities, said Monday.

“Short-term production disruptions and the reflection of recall costs are unavoidable, but if the recall is carried out through an over-the-air update, the impact on earnings is unlikely to be significant,” said Kim Gwi-yeon, an analyst at Daishin Securities.

“It is unfortunate that a defect in one of this year’s key new models led to a fatal accident and a recall, but given the immediate response strategy and the scale of the recall, the impact on the company’s fundamentals is likely to be limited.”

Brokerages expect the recall process to consist of temporary software updates, hardware improvements and the provision of rental cars.

“If hardware replacement is required, the cost could reach as much as $800 per vehicle, including sensors, modules and labor, bringing the total to 82 billion won,” Kim said. He also projected an additional monthly cost of 22 billion won, given Hyundai Motor’s plan to provide rental cars to owners who want them until repairs are completed.

Hyundai Motor's Palisade [HYUNDAI MOTOR]

“Separate from the limited recall costs, the risk remains that class-action lawsuits and punitive financial penalties could be imposed,” Kim said. “Since the loss of life and the design defect are being emphasized together, continued monitoring is necessary.”

Reuters reported Friday that Hyundai Motor would halt new-vehicle sales in the United States and Canada and carry out a recall following the death of a 2-year-old girl in Ohio on March 7 in an accident involving the Palisade’s power seats.

Hyundai Motor has suspended sales of the all-new Palisade and is preparing recall procedures for vehicles equipped with second- and third-row power seat-folding features among units produced from 2025 through last Wednesday.

The Palisade is produced for both domestic sales and exports at Hyundai Motor’s Ulsan plant. In 2025, 59,506 units were sold in Korea and more than 100,000 were exported. Of those, 57,474 units in Korea and 74,965 units in North America are expected to be subject to the recall.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KO SUK-HYUN [[email protected]]