Hyundai Motor Co. has ended production of the electric SUV GV70 at its Alabama assembly plant as part of a broader review of its global manufacturing network. Production of the model at the Hyundai Motor Manufacturing Alabama (HMMA) facility ceased in late May, marking the end of U.S. GV70 output roughly two years and four months after assembly began in February 2023. From January through July, HMMA produced 1,367 units of the electric GV70 for the U.S. market, down 18.3% from 1,674 units in the same period last year, and deliveries fell to just 15 units in July.
The decision reflects a combination of sluggish sales and impending changes to federal incentives. The U.S. government plans to eliminate the $7,500 electric-vehicle tax credit for domestically assembled vehicles on September 30, seven years ahead of schedule. With the credit set to expire, the cost advantage of local GV70 production will disappear, and rising tariff costs have further squeezed margins.
In response, Hyundai is shifting focus toward high-profit hybrid models at its Alabama plant. Santa Fe Hybrid output there has nearly tripled, rising from 2,325 units in January to 6,888 units in July. Hybrid sales helped Hyundai Motor Co. and Kia Corp. achieve a combined operating profit of 13.0086 trillion won in the first half of the year, even after absorbing 1.6 trillion won in U.S. tariffs. This performance lifted the group ahead of Volkswagen Group on a half-year basis, trailing only Toyota Group globally.
Hyundai is evaluating several options for the electric GV70 lineup, including relocating production to its new Georgia facility—currently running at 72.6% capacity—to avoid a 15% tariff, or shifting assembly to South Korea for export to the U.S. The company also plans to build the IONIQ 6 and high-performance IONIQ 6N in Korea for U.S. release later this year.
Meanwhile, HMMA will expand production of the compact SUV Tucson by relocating all U.S. volume from Kia’s Mexican plant to Alabama, avoiding a 25% import tariff. Kia’s factory in Mexico will be reconfigured to serve Central and South American markets and ramp up hybrid output for local demand, supported by Hyundai Wia supplying 1.6L Gamma engines from early next year.
An industry insider said, “Hyundai Motor is actively pursuing global production network adjustments in response to the U.S. elimination of electric vehicle purchase subsidies and high tariff impositions,” adding, “By increasing U.S. production of popular models, they can maximize absorption of price increase factors due to tariffs while improving profitability.”
Source: Business Korea
