Hyundai Motor Group announced on Sunday that it will pour 125.2 trillion won, or about $86 billion, into its South Korean operations between 2026 and 2030, marking one of the largest domestic commitments ever made by the automaker.
The decision follows the finalization of a new trade deal between Seoul and Washington that reduces US tariffs on South Korean vehicles to 15 percent from 25 percent.
The Hyundai Motor investment aims to stabilize production, expand key technologies and strengthen export competitiveness amid shifting global trade dynamics.
The new plan represents a substantial increase from the group’s 89.1 trillion won in investments made from 2021 to 2025 by Hyundai Motor and Kia Corp.
It also comes as South Korea pledged to invest $350 billion in US strategic sectors, including semiconductors and clean energy, under the bilateral agreement.
President Lee Jae Myung met with Hyundai Motor Group Chairman Euisun Chung and other industry leaders on Sunday, two days after the trade deal’s terms were released.
The agreement is expected to reshape automotive trade between the two countries while softening potential shocks from tariffs introduced under President Donald Trump’s latest economic measures targeting foreign vehicle imports.
“We are well aware of concerns about exports declining and domestic production shrinking due to US tariffs of 15 percent,” Chung said after the meeting.
“The Hyundai Motor investment will allow us to diversify export markets, increase exports from domestic factories and more than double auto exports through new electric vehicle factories by 2030.”
The group also plans to assist auto parts suppliers affected by the tariff changes, particularly smaller manufacturers who rely heavily on US bound shipments.
Analysts say the Hyundai Motor investment reflects both urgency and strategic positioning as global carmakers race to secure supply chains and ramp up electric vehicle production.
Dr. Eun Seo Min, an automotive economist at the Korea Institute for Industrial Strategy, said the investment signals a long term commitment to strengthening domestic capabilities at a time when the EV market is rapidly expanding.
“Hyundai is facing intense competition from Chinese EV manufacturers, US incentives and tightening European emissions standards,” Min said.
A major domestic investment ensures that research, innovation and production will remain anchored in South Korea, giving the company more control over quality and advanced technologies.
Industry observers noted that Hyundai Motor Group has been under pressure to accelerate its shift toward EVs and artificial intelligence backed mobility solutions.
Much of its new spending is aimed at boosting research, upgrading facilities and advancing AI integration across manufacturing and vehicle platforms.
“The fact that more than 50 trillion won is dedicated to AI and future businesses shows how seriously Hyundai is approaching next generation manufacturing,” said Daniel Cho, a Seoul based mobility consultant. “AI driven production will determine which automakers stay competitive over the next decade.”
According to the group, the Hyundai Motor investment will be divided into three major categories, 50.5 trillion won allocated to AI and future business opportunities, including autonomous driving, software defined vehicles and EV innovation
48.4 trillion won dedicated to research and development across vehicle platforms, 36.2 trillion won earmarked for optimizing production facilities and building a new corporate skyscraper in Seoul
For comparison, Hyundai’s previous five-year investment cycle focused more on battery partnerships, combustion engine efficiency and global factory expansion. The new investment plan shifts more heavily toward high tech and domestic manufacturing.
“The scale of this Hyundai Motor investment places it among the top industrial commitments in South Korean history,” said Park Ji Hyun, a senior researcher at the Korea Auto Forum.
“It will have broad ripple effects on parts suppliers, universities and robotics companies that work closely with Hyundai and Kia.”
The government projects that the initiative could support more than 200,000 direct and indirect jobs over the next decade, although official figures will depend on market conditions.
In Ulsan, where Hyundai Motor operates its largest manufacturing complex, factory workers welcomed the announcement but expressed hope that the investment would translate into long term stability.
“Everyone has been anxious about the impact of US tariffs,” said Kim Joon Ho, a veteran assembly worker. “Hearing that the company will expand domestic factories and research centers gives many of us confidence that jobs will not be moved overseas.”
Local business owners also expect the Hyundai Motor investment to boost the regional economy.
“When Hyundai invests, the entire city feels the effect,” said Park Hana, who runs a parts supply shop near the Ulsan plant. “Stronger orders mean more work for small suppliers, and that keeps local businesses alive.”
Not all reactions were positive. Some labor groups warned that increased automation through AI and robotic manufacturing could reduce hiring.
“We support technological advancement, but it must not come at the cost of workers’ livelihoods,” said Lee Dae Hyun of the Korean Metal Workers Union. “There needs to be clear transparency on how AI driven changes will affect employment.”
Experts predict that the Hyundai Motor investment will position the company as a stronger global competitor in electric mobility and AI supported vehicle technology.
The group plans to unveil additional details on new EV factories, battery partnerships and smart manufacturing systems in the coming months.
The reduced US tariffs are expected to boost price competitiveness for South Korean vehicles in the American market, although analysts caution that political shifts could alter trade conditions again.
“This investment is designed to weather uncertainty,” Min said. “By focusing on domestic strength and technological leadership, Hyundai is effectively preparing for multiple possible futures.”
Industry analysts say the outlook for South Korea’s auto sector remains cautiously optimistic as automakers adapt to global EV demand, new trade rules and rapid digital transformation.
With the Hyundai Motor investment set to reshape manufacturing, research and export strategies, the automaker is positioning itself for long term resilience in a volatile global market.
As South Korea deepens its economic ties with the United States and strengthens domestic production capacity, the company’s multiyear spending plan is expected to influence the broader direction of the country’s automotive and technology industries.