Hyundai Motor's Q2 earnings dip by 16% due to impact from US tariffs
Hyundai Motor, the world's third-largest automaking group by sales, faced a significant setback in its second-quarter earnings due to US tariffs on vehicles and parts. Despite achieving record sales during the period, the company's operating profit dropped by around 16% year-over-year, falling to approximately $2.64 billion.
The US government's 25% tariff on foreign-made cars, implemented in April 2025, cost Hyundai around $606 million (roughly 828 billion won). This tariff burden led to Hyundai's first double-digit profit decline in a second quarter, despite strong sales performance.
Hyundai has issued warnings about potentially greater financial tolls from these tariffs in future quarters, emphasizing the growing challenge posed by the continued tariff regime. The company's revenue for the second quarter rose by 7% compared to the same period a year earlier, amounting to 48.3 trillion won, but this increase was not enough to offset the impact of the tariffs.
Despite the cost from U.S. tariffs, Hyundai is currently sticking to its annual profit target. The company's operating profit compared with a LSEG SmartEstimate of 3.5 trillion won, but the exact figures were not disclosed. The consensus estimate gives more weight to analysts who are more consistently accurate.
Hyundai Motor shares fell 3.2% after the earnings announcement, reflecting investor concerns about the ongoing impact of US tariffs on the company's operations. The company acknowledged that U.S. tariffs pose risks to its operations and have the potential to affect its future earnings.
In summary, while Hyundai maintained robust sales in Q2 2025, its profitability was substantially dented by the new 25% US tariffs on imported vehicles and parts, resulting in a roughly 16% profit decline and over $600 million in tariff-related costs. The company is currently facing challenges in offsetting these costs and maintaining its profitability in the face of ongoing tariffs.
The ongoing tariff regime, specifically the 25% tariff on foreign-made cars implemented in April 2025, poses a significant financial risk to the automotive industry, as demonstrated by Hyundai Motor's experience. In Q2 2025, Hyundai faced a substantial profit decline due to these tariffs, costing the company approximately $606 million and causing a 16% drop in operating profit.
Hyundai's revenue for the quarter showed a 7% increase compared to the previous year, reaching 48.3 trillion won, but this growth was not sufficient to offset the negative impact of the tariffs on its profitability. The company's shares fell 3.2% after the earnings announcement, reflecting investor concerns about further financial tolls from the US tariffs on Hyundai's future operations.
Despite the challenges posed by these tariffs, Hyundai is currently sticking to its annual profit target, although the exact figures were not disclosed, leaving potential uncertainty for concern among the finance industry.
