Hyundai’s Q4 2025 operating profit fell 40% amid US tariffs, but the automaker aims for higher margins and sales in 2026. Discover the full analysis now.
Q4 2025 earnings miss expectations
Hyundai Motor Co. reported a sharp 40 % plunge in operating profit for the fourth quarter of 2025, posting 1.7 trillion won (about $1.19 billion). The result fell short of analysts’ consensus of 2.7 trillion won and the company’s own guidance.
US tariff policy as the main driver
The decline is largely attributed to the United States’ tariff regime on Korean‑made cars. In April 2025 Washington slapped a 25 % duty on imported vehicles, which was later reduced to 15 % after a trade deal was reached in November. The lingering uncertainty and the prospect of a further tariff hike, signaled by President Donald Trump, have weighed heavily on Hyundai’s bottom line.
Three consecutive quarters of profit erosion
This is the third straight quarter Hyundai’s profit has contracted, underscoring the cumulative impact of trade frictions and slower demand in its core markets.
Strategic outlook for 2026
Despite the near‑term setback, Hyundai – together with its affiliate Kia – remains the world’s third‑largest automaker by sales. The group is projecting an operating‑margin range of 6.3 %–7.3 % for 2026, up from 6.2 % in 2025. To hit the target, Hyundai plans to boost vehicle deliveries, especially in its premium lines, and improve cost efficiency.
Challenges ahead
- Slower growth in North America, Europe and China.
- Intensifying competition from both established brands and new entrants in emerging economies.
- Potential delay of a $350 billion investment programme due to a weakening won and protracted trade negotiations.
What’s next?
While the company acknowledges a “tough” operating environment for the remainder of the year, executives remain cautiously optimistic that a stable trade framework and an expanded premium‑vehicle portfolio will restore profitability in 2026.