By Hyunjoo Jin
SEOUL (Reuters) – South Korea's Hyundai Motor said on Thursday it is in talks with General Motors (NYSE:) to supply its U.S. counterpart with commercial electric vehicles, as it expects sales growth to halve this year due to falling demand. .
She also pointed to political risks in the United States with US President Donald Trump taking office promising to impose tariffs on imports, although she said any negative impact would be greater on Japanese competitors.
The automaker, which signed a preliminary partnership agreement with General Motors last year, said it also aims to sign binding contracts on cooperation in the procurement of spare parts, passenger vehicles and commercial vehicles during the first quarter of this year.
“We are considering rebranding our commercial electric vehicles and supplying GM… The deal will pave the way for our entry into the North American commercial vehicle market,” Lee Seung-jo, Hyundai's chief financial officer, said on a call with analysts.
The talks come as automakers brace for political uncertainty in the United States, the world's second-largest auto market, which could lead to higher demand. US President Donald Trump said this week that he may impose 25% tariffs on Canada and Mexico starting February 1.
Meanwhile, political turmoil has shaken confidence at Hyundai's doorstep in Seoul.
“We expect more trade uncertainties this year than ever before due to potential policy changes not only in the domestic market but also in the US, while there will be stricter emissions rules in Europe,” Lee said.
Hyundai expects to suffer less from the impact of US tariffs than its Japanese competitors, including… Toyota Engine (NYSE:) and Honda (NYSE:) Engine with the largest manufacturing presence in Mexico and Canada.
The South Korean automaker said it plans to increase the localization of production in the United States to minimize any impact of the tariffs. It also said it would make hybrid cars at its new plant in Georgia.
Slow growth
Hyundai, which with its subsidiary Kia is the world's third-largest automaker by sales, on Thursday expected 2025 revenue growth of 3.0% to 4.0%, compared to 7.7% the previous year. It expects an operating margin of 7.0% to 8.0%, from 8.1% in 2024.
Hyundai cited uncertainties including a slowdown in key markets, slowing demand for electric vehicles and macroeconomic fluctuations, with Trump saying he would consider eliminating tax breaks on electric vehicle purchases.
Hyundai said the decline in the value of the won that began in early December after South Korea's now-deposed president declared martial law will boost repatriated profits, but will also inflate vehicle warranty provisions, affecting profit margins.
In the October-December period, Hyundai reported operating profit of 2.8 trillion won ($1.95 billion) as it spent on promotions in the sluggish auto market.
That was lower than the 3.2 trillion won average of estimates from 24 analysts compiled by LSEG SmartEstimate, which are weighted according to the estimates of consistently more accurate analysts.
During the quarter, global retail sales declined as strong sales in the United States and India were offset by slower demand in South Korea, Europe and China.
Hyundai shares stabilized after the earnings announcement.
The automaker also said it is considering supplying Ioniq 5 EVs to robotics developer Waymo in North America and beyond. Hyundai, which is developing self-driving technology at its Motion unit, said it aims to commercialize automated taxis next year.
It said it was open to listing Boston Dynamics' humanoid robotics unit but would not consider it in the near term.
($1 = 1,436.4200 won)
