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Hyundai and Kia set HEV sales records in U.S., but challenges from Japan and tariffs increase

Published: 03 Dec. 2025, 19:04 Updated: 03 Dec. 2025, 19:25

The picture shows a Hyundai Tucson Hybrid. [YONHAP]

Hyundai and Kia achieved their highest U.S. hybrid-electric-vehicle (HEV) sales in November, but they face mounting pressure as Japanese automakers prepare to ramp up their own HEV efforts.

Hyundai Motor Group said on Wednesday that the combined U.S. sales of Hyundai and Kia hybrids in November reached 36,172 units — 20,377 for Hyundai and 15,795 for Kia. That marks a 48.9 percent increase from the 24,296 units sold in November last year, setting a new monthly record.

Sales were driven by popular and affordable sedans and practical SUVs such as 3,405 units of the Hyundai Palisade, 2,208 of the Elantra, 5,664 of the Santa Fe, 5,040 of the Kia Niro and 6,385 of the Kia Sportage HEV models.
In contrast, EV sales fell sharply. Hyundai and Kia sold a total of 4,618 EVs in November, down 58.9 percent from a year earlier.

The sharp drop follows the expiration of U.S. federal EV tax credits under the Inflation Reduction Act in October, which led many consumers to shift toward hybrids.

“As consumer demand shifts, Kia’s diverse product lineup and growing hybrid portfolio have us on the verge of our third consecutive annual sales record,” said Eric Watson, vice president in charge of sales operations at Kia America.

The policy stance of the Trump administration also emerges as a key variable.

Bloomberg reported on Tuesday that U.S. President Donald Trump plans to announce as early as this week a proposal to ease the fuel efficiency standard set under the Biden administration, which targets 50.4 miles per gallon by 2031. Specific figures have not yet been disclosed.

U.S. President Donald Trump makes an announcement at the White House in Washington on Dec. 2. [EPA/YONHAP]

If enacted, the change could reduce the cost burden on automakers by limiting the need for additional fuel-saving components. That would enable more competitively-priced hybrids and make HEVs more attractive to consumers compared to EVs or less efficient internal combustion vehicles.

The challenge for Hyundai and Kia is that Japanese automakers are moving faster.

Toyota plans to discontinue the internal combustion engine version of its RAV4 next year and sell only HEV and plug-in hybrid (PHEV) variants.

This photo provided by Toyota shows the RAV4 Hybrid, a popular hybrid compact SUV. [AP/YONHAP]

Toyota sold 358,134 RAV4s in the United States from January to September, ranking third after the Ford Motor F-series and Chevrolet Silverado. The Japanese automotive manufacturer priced the RAV4 at $31,900, slightly below Hyundai’s Tucson HEV at $32,200.

Toyota already produces HEV models such as the RAV4, Camry and Sienna at its U.S. plants in Kentucky, Indiana and Texas, allowing it to avoid the 15 percent import tariff imposed on exports.

The company also operates 11 production facilities in the United States and announced in November it would invest $912 million to modernize its hybrid production lines.

Honda, Nissan and Mitsubishi Motors are also reviewing plans to jointly produce vehicles in the United States.

Japanese automakers held a 70 percent share of the U.S. HEV market in the second quarter of this year, compared to Hyundai and Kia’s 7 percent, according to Japanese newspaper Nikkei.

However, the report also noted that Hyundai and Kia have recently adopted a more aggressive sales strategy, prompting Japanese competitors to ramp up investments in response.

The critical test for Hyundai and Kia will come next year. Aside from the Santa Fe HEV, most of the companies' HEV models, such as the Elantra HEV, are produced in Korea and shipped to the United States, where they now face a15 percent tariff.

To reduce costs, the companies plan to begin producing popular HEV models at Hyundai Motor Group Metaplant America, their new factory in Georgia set to open next year. But transferring domestic production overseas requires negotiations with labor unions over adjustments in local output.

“If Hyundai and Kia cannot increase local production quickly, they will inevitably lose ground to Japanese brands in the battle for market share,” said Lee Hang-koo, adviser at the state-run Korea Automotive Technology Institute. “They need to release strategic models and reach agreements with labor to expedite the transfer of production.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM HYO-SEONG [[email protected]]