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Despite hitting revenue record, Kia's 2025 operating profit dips 30 percent due to U.S. tariffs

Published: 28 Jan. 2026, 18:26

Hyundai Motor and Kia headquarters in southern Seoul [HYUNDAI MOTOR GROUP]

Kia’s operating profit fell by nearly 30 percent in 2025 despite its highest annual revenue, as additional costs from U.S. tariffs cut into earnings, the company said on Wednesday.

Kia said its 2025 revenue reached 114.14 trillion won ($80 billion), up 6.2 percent from a year earlier and the highest in the company’s history. It marked the second consecutive year the automaker topped 100 trillion won, after posting 107.45 trillion won in 2024.

Despite the revenue increase, Kia reported an annual operating profit of 9.08 trillion won, down 28.3 percent from 2024. Its operating margin also declined to 8 percent from 11.8 percent.

The company attributed much of the profit decline to U.S. tariffs. Kia said it incurred 3.09 trillion won in additional costs through the end of last year due to the 25 percent tariff that took effect in April 2025.

“Even though the 15 percent tariff was applied retroactively from Nov. 1 last year, we effectively paid the 25 percent tariff for about two months because of inventories held by our U.S. unit,” said Yoon Byeong-ryeol, head of Kia's investor relations team. “We also faced higher costs in the North American and European markets due to stronger competition.”

Kia’s Chief Financial Officer Kim Seung-jun added that the company “only started paying the 15 percent tariff purely at the end of December last year.”

Still, sales of higher value vehicles such as hybrids and EVs helped drive the revenue increase.

Last year, Kia’s wholesale vehicle sales reached 3,135,873 units, up 1.5 percent from 2024. Environmentally friendly vehicle sales jumped 17.4 percent to 749,000 units, supported by strong demand for hybrid models in the United States and EVs in Western Europe.

Kia's Sorento Plug-in Hybrid is seen in this image provided by the company. [AP/YONHAP]

The exchange rate also helped boost Kia’s average selling price, as overseas sales generated more revenue when converted into won.

“Strong and sustained global demand for environmentally friendly vehicles, especially hybrids in the United States and electric vehicles in Western Europe, led to record-high revenue,” Kia said.

For 2026, Kia set guidance that projects sales of 3.35 million units, revenue of 122.3 trillion won and operating profit of 10.2 trillion won, with an operating margin of 8.3 percent. The targets reflect a 6.8 percent increase in sales and a 7.2 percent increase in revenue from last year.

“Kia expects little change in overall market demand this year but plans to maintain strong profitability through new vehicle launches in the United States and Europe,” CFO Kim said.

In the United States, Kia plans to roll out updated versions of the Telluride and Seltos, while in Europe it aims to expand its mass-market EV lineup by adding the EV3, EV4 and EV5 to the existing EV2.

A car vlogger checks the Kia Stonic GT-line car at the Kia stand during the Bucharest Auto Show 2025, in Bucharest, Romania on Oct 7, 2025. [EPA/YONHAP]

Also on Wednesday, Hyundai Mobis, a parts-making affiliate of Hyundai Motor Group, reported record revenue of 61.12 trillion won, up 6.8 percent from a year earlier, and operating profit of 3.36 trillion won, up 9.2 percent. But its operating profit for the fourth quarter of 2025 dropped 5.6 percent to 930.5 billion won.

Hyundai Mobis said it plans to expand its portfolio into robotic parts, supplying actuators — the key power‑driving components — for the humanoid robot Atlas developed by affiliate Boston Dynamics.

A major variable this year remains U.S. tariff policy.

U.S. President Donald Trump said on Monday that he would raise tariffs on Korea from 15 percent back up to 25 percent, only to reverse course the next day and say he will “work something out with South Korea,” creating market uncertainty.

Hanwha Investment & Securities earlier estimated that Kia would face 3.9 trillion won in tariff costs this year under a 25 percent rate, compared to 2.4 trillion won under a 15 percent rate — a difference of 1.5 trillion won.

Kia shares closed at 140,970 won on Wednesday, down 2.48 percent from the previous day, while Hyundai Mobis fell 2.83 percent to 447,000 won.

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 NA SANG-HYEON [[email protected]]