Hyundai will invest approximately US$500 million to expand hybrid and powertrain manufacturing operations in Alabama.
Local Tucson Hybrid production will reduce tariff exposure and support regional sourcing targets.
Hyundai plans 58 new or updated North American models through the end of this decade.
Hyundai Motor plans to invest approximately US$500 million (CDN$700 million) in its Alabama operations to increase hybrid production and manufacture new powertrains.
The spending will support U.S. production of hybrid versions of the Hyundai Tucson and Santa Fe. It will also fund new engines and an extended-range electric vehicle powertrain intended for future North American models.
Hyundai currently imports the U.S.-market Tucson Hybrid from South Korea. Moving production to Alabama would reduce the company’s exposure to American vehicle tariffs and increase the use of locally manufactured components.
The Tucson is Hyundai’s bestselling model in the U.S. and Canada and will enter a new generation for the 2027 model year. Santa Fe production is also expected to benefit from the investment. Hyundai has not provided detailed timing for either hybrid program.
Demand for hybrids has grown as higher gasoline prices and slower EV adoption influence purchasing decisions. The company’s U.S. hybrid deliveries increased 33% in August, accounting for a record 29% of its total sales that month. Canadian Tucson sales were up 24% in the same period.
The Alabama project is one part of Hyundai’s wider U.S. manufacturing strategy. The automaker pledged US$26 billion (CDN$36.9 billion) in American investment through 2028, covering vehicle production, parts sourcing, engineering and other industrial expansion.
Hyundai Could Export Body-on-Frame Trucks and SUVs Globally from the United States
Hyundai also plans to add enough North American capacity to produce another 500,000 vehicles annually. By 2030, the company wants 80% of the vehicles it sells in the region to contain locally sourced content.
Its upcoming product program includes 58 new or substantially updated North American models through the end of the decade. Globally, Hyundai intends to increase annual manufacturing capacity by 1.27 million vehicles over the same period.
Extended-range EVs are expected to become another part of that strategy. Hyundai has not identified the first models that will receive the Alabama-built EREV system or confirmed production volumes. However, a company spokesperson said the investment will finance its development and manufacturing alongside engines for future North American vehicles.
CEO Jose Muñoz also indicated that Hyundai is preparing to compete in the body-on-frame truck and SUV segments traditionally controlled by Detroit manufacturers. Perhaps the ideal EREV powertrain candidate?
Source: Automotive News
