Dive Brief:
- Hyundai Motor reported a $7.1 billion decline (21.7%) in net profit in 2025, despite record-high global vehicle sales of 4.1 million units and net revenue of $128.4 billion, the company announced in its earnings report on Thursday.
- The declines were even higher in Q4, with its net profit plunging 52.1% YoY to $814 million, despite Hyundai achieving its highest-ever quarterly revenue of $32.3 billion on brisk vehicle sales.
- The automaker cited the impact of U.S. tariffs as a significant factor in the losses, as well as higher sales incentives to stay competitive in order to maintain its global market share.
Dive Insight:
The impact of higher costs due to tariffs and dealer incentives to boost sales also eroded Hyundai’s net margins, which fell from 7.5% to 5.6% in 2025. Hyundai expects the challenging market conditions to continue this year, citing slower growth in the global auto industry and increased competition in emerging markets.
Despite a sharp decline in net profit, Hyundai achieved its best-ever retail sales in the U.S. in 2025 for the fifth consecutive year, with vehicle sales of 901,686 units. It was an 8% YoY increase. Wholesale vehicle sales topped 1 million units for the first time ever in the U.S. last year.
Globally, Hyundai reported sales of 4.1 million vehicles, relatively unchanged from 2024. The sales increase and higher revenue helped offset the automaker’s losses in 2025.
To remain competitive, the automaker plans to increase its total investments to $12.3 billion in 2026, including $6.2 billion in capital expenditures. Hyundai also plans to spend $5.1 billion on research and development and roughly $965 million in other strategic investments, per its earnings report.
While Hyundai aims to continue to invest in electrification and localized production, the automaker will maintain a more flexible powertrain strategy that includes a mix of internal-combustion-engine vehicles, hybrids and electric vehicles to meet market demand, per the release.
Earlier this month, Hyundai reported that electrified vehicles accounted for 30% of Hyundai’s retail sales mix in the U.S. in 2025, with sales of hybrid vehicles jumping 36%. Globally, Hyundai sold 961,812 electrified vehicles, a 27% YoY increase, indicating strong demand for these models.
Hyundai’s 2026 guidance targets global vehicle sales of 4.16 million units, with annual revenue growth between 1% and 2% with an operating profit margin between 6.3% and 7.3%.
