Hyundai is relocating the Tucson hybrid production from Korea to its facility in Montgomery, Alabama. The company plans to invest approximately $500 million in its Alabama manufacturing operations to develop new engines, hybrid components, and an extended-range electric powertrain. This shift will allow Hyundai to avoid a 15% tariff on Korean-built vehicles, as all cars produced in Alabama are exempt from this tax.
Hyundai’s President and CEO, José Muñoz, made the announcement during the Automotive News Congress in Detroit, expressing the importance of the U.S. market to Hyundai. The Tucson hybrid is currently Hyundai’s best-selling vehicle in the U.S., and this move will also include the Santa Fe hybrid model.
With plans to launch the redesigned 2027 Tucson and Tucson Hybrid later this year, and the Santa Fe Extended-Range Electric Vehicle (EREV) expected in 2027, Hyundai emphasizes its commitment to investment in America. The Alabama plant is vital for the company, being its first U.S. assembly facility and the largest manufacturing employer in Montgomery County, employing around 4,200 workers.
Overall, this investment follows a series of financial commitments made by Hyundai to expand operations in Alabama, as part of a larger $26 billion investment plan in the U.S. from 2025 to 2028. With rising gas prices and demand for hybrids, Hyundai’s U.S. hybrid sales surged by 33% in August, reflecting the company’s growing dominance in this market segment.
