Hyundai CEO emphasizes the need for a fair market to reduce risks from China.
The auto industry has been buzzing with concerns about the impact of Chinese electric vehicles on the market, with many automaker CEOs sounding alarms about the potential threat to their businesses. However, Hyundai CEO José Muñoz is taking a more optimistic stance. He believes that a combination of protective policies and product enhancements can help fend off competition from China. Despite feeling the pressure, Muñoz remains determined and recognizes the risk of a flood of affordable Chinese imports if proper safeguards aren’t established.
“At the reveal of the new 2027 Hyundai Tucson in New York City, Muñoz stated, “As long as there is a level playing field for everybody, that’s all we ask, right? We compete everywhere in the world, and in markets where that position is respected, it’s really good for us.”
Chinese automakers have made significant inroads in Europe, capturing market share and challenging established brands like Volkswagen, Volvo, and Mercedes by offering lower-priced vehicles. U.S. automakers fear a similar scenario could unfold if Chinese cars are allowed into the American market.
Currently, steep tariffs and regulations that restrict the sale of vehicles with Chinese software have made it nearly impossible for Chinese brands to enter the U.S. market. However, recent developments suggest that this barrier may be weakening. There have been indications that the U.S. government might welcome Chinese automakers to establish manufacturing plants in the country, provided they hire American workers. Experts believe it’s only a matter of time before Chinese brands find a way to sell their vehicles in the U.S.
If Chinese manufacturers do set up shop in North America or partner with local companies, it’s uncertain whether Hyundai has a solid strategy in place. When asked if the company was preparing for the possibility of Chinese imports, Muñoz admitted they had not yet developed specific strategies in response to Chinese competition. “We are always trying to do better,” he said.
Hyundai’s approach seems to focus on vertical integration, aiming to reduce costs by producing its own technology and components. “This allows us to be more competitive,” Muñoz explained. “Better quality over cost.” He pointed to Hyundai’s $5.8 billion investment in Louisiana for green steel production as a prime example of this strategy, which is expected to yield more competitive and environmentally friendly materials. This philosophy extends to software and other technologies that Hyundai aims to develop in-house.
“There’s always room to improve,” he continued. “If a Chinese competitor enters the market, we’ll see what happens, but I don’t have a crystal ball. I look at Europe and see what has occurred there, and we might expect similar trends.”
Chinese vehicles in Europe are typically around 30 percent cheaper than their European counterparts, even after accounting for EU import tariffs. The U.S. has fallen behind in electric vehicle adoption, especially after federal subsidies were cut. In Europe, EVs make up over 20 percent of sales; in China, it’s over 60 percent, while the U.S. lags at less than 6 percent.
Political divisions and insufficient charging infrastructure contribute to sluggish sales, but the lack of affordable electric models is often cited as the biggest hurdle to adoption in the U.S. Muñoz believes there’s still potential for the U.S. market to catch up. “I think the American market is the most competitive in the world,” he noted, highlighting Hyundai’s strong EV sales in the country. While that may be true, the company’s hybrid models are currently sustaining its EV business, with hybrids now available across a wide range of vehicles, including the popular Tucson.
Unlike some competitors, Hyundai remains committed to electric vehicles, continuing to sell the Ioniq 5 and Ioniq 9 in the U.S., along with an expanding lineup of hybrids. Recently, the Hyundai Group surpassed Honda to become the second-largest seller of hybrids in the U.S., trailing only Toyota.
Muñoz acknowledged that the U.S. is still working to catch up to China’s lead in EV battery production. Hyundai has a battery manufacturing joint venture with SK On in Georgia, close to its massive Metaplant where all its EVs and hybrids are produced. “If you don’t have the critical mass, the volume, it’s very difficult to be competitive,” he said. “One of the biggest costs is the battery, which is key. However, there’s a lot of battery production happening in the U.S. with some of the best global manufacturers, so I’m not concerned.”
