Hyundai’s Q3 Operating Profit Plummets 29% to ₩2.54 Trillion - What’s Driving the Downturn?

Hyundai hits a speed bump as quarterly profits skid nearly one-third.

The Numbers Don't Lie

₩2.54 trillion operating profit tells the story - a 29% nosedive from last year's performance. That's not just a correction, it's a full-scale retreat.

Behind the Wheel

Global supply chain headaches? Electric transition costs? Consumer spending shifts? The automaker's navigating multiple storms simultaneously while traditional combustion engines face extinction-level pressure.

Market Reality Check

Another quarter proving that legacy automakers are stuck between yesterday's business models and tomorrow's technological demands - and investors are paying the price for that indecision.

Tariffs increase cost burden

Hyundai stated that U.S. tariffs cost the company ₩1.8 trillion in the third quarter, compared to ₩828 billion in the previous quarter. The company said, “Changes in the trade environment, including tariffs, WOULD impact our profits and are a major risk factor for future business operations.”

Hyundai also expects sales in emerging markets to slow further, though it did not specify markets or timing.

Despite the tariff burden, Hyundai’s U.S. retail sales ROSE 12.7% from a year earlier. Sales were supported by the company’s electric vehicle lineup, which had benefitted from a tax incentive that expired at the end of September, and by the sale of higher-margin models.

Hybrid vehicles made up 20% of Hyundai’s U.S. sales during the quarter, marking the highest share recorded for the company in that market to date.

In Europe, Hyundai reported 3.2% year-on-year growth in sales. Eco-friendly models made up a significant portion of this, with battery-operated and hydrogen-powered vehicles accounting for 49% of total sales in the region.

The company said demand for its low-emission vehicles in Europe remains steady.

Strategy shifts toward hybrids and Genesis

Hyundai, together with its affiliate Kia, forms the world’s third-largest automaking group by global sales. The automaker said it will maintain its revenue and profit margin targets for the year, even with the uncertainty around tariffs.

The company, which also includes Hyundai Mobis in its wider group structure, said the recent trade agreement between South Korea and the U.S. has “resolved all of the uncertainty” regarding automobile tariffs, according to a Hyundai executive speaking to reporters on Thursday.

The firm is planning to expand its hybrid lineup and is aiming for stronger sales of its Genesis luxury sedan line in 2026. It is also considering producing a Genesis hybrid model in the U.S. to further reduce tariff pressure and align local production with U.S. market demand.

Hyundai said demand for pure battery electric vehicles may recover after 2030, though it did not provide any details.

The company booked ₩2.5 trillion in operating profit for July to September last year, compared to ₩3.6 trillion in the same quarter a year earlier. Analyst consensus had expected revenue of ₩45.8 trillion, meaning Hyundai outperformed on the top line.

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