Hyundai Delays $730M Hypercasting Plant Amid EV Demand Dip and U.S. Tariffs

Hyundai Motor Group has postponed the launch of its $730 million hypercasting facility in Ulsan, South Korea, from 2026 to potentially 2028, driven by softening global electric vehicle (EV) demand and a 25% U.S. tariff on imported vehicles, according to Seoul Economy via The Korean Car Blog. This delay impacts Hyundai’s plans to adopt advanced manufacturing for EVs like the Ioniq 5, prompting a strategic pivot to bolster U.S. production.

Hypercasting: A Game-Changing but Challenging Technology

Hypercasting, inspired by Tesla’s gigacasting, involves injecting molten aluminum into large molds under high pressure to form major vehicle body sections in one piece. This reduces component count, simplifies assembly, and cuts production costs—Tesla reportedly achieved 40% savings. Hyundai aimed to leverage hypercasting for cost-efficient EV production, minimizing welding and enhancing quality control. However, the process has drawbacks: unlike traditional vehicles, where damaged sections can be replaced along weld lines, hypercast structures may require costly repairs or lead to total write-offs by insurers, impacting owners and repair shops.

Tariffs and Demand Slowdown Force a Rethink

Two factors are reshaping Hyundai’s strategy. First, global EV demand growth has slowed, creating what analysts call a “demand chasm.” An industry insider told Seoul Economy that Hyundai’s delay is a move to “control the pace” of its EV investments while boosting hybrid production to align with consumer trends. Second, the U.S.’s 25% tariff on foreign-made vehicles adds roughly $5,900 per vehicle. With Hyundai and Kia exporting over 1 million vehicles to the U.S. in 2024, this could cost the group $5.9 billion annually—nearly 30% of their prior year’s combined operating profits.

Accelerating U.S. Production to Dodge Tariffs

The U.S. remains Hyundai’s largest market, prompting a shift toward domestic production to mitigate tariff costs. Hyundai Motor Group plans to invest $9.3 billion in U.S. operations over the next four years, expanding its Georgia Metaplant’s annual capacity from 300,000 to 500,000 vehicles. This will boost total U.S. production to 1.2 million vehicles yearly, reducing reliance on South Korean exports and shielding the company from tariff-related losses.

Implications for EV Owners and the Industry

For EV enthusiasts, the hypercasting delay may slow the arrival of more affordable, efficiently produced models like future Ioniq variants. While hypercasting promises lower manufacturing costs, its repair challenges could raise ownership costs, particularly for accident-prone drivers. Industry-wide, Hyundai’s pivot reflects broader trends: automakers are balancing EV ambitions with hybrid demand and navigating trade barriers. By 2028, improved EV infrastructure and consumer sentiment may better support Hyundai’s hypercasting goals, but for now, tariffs and market dynamics take precedence.

Photos courtesy of Hyundai