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Key Points

US tariff changes are about to flip the price relationship between Korean and Japanese hybrid vehicles. Japanese models will become cheaper than their Korean competitors due to reduced import duties. This creates a significant challenge for Hyundai and Kia, which have been experiencing strong hybrid sales growth in recent years. The situation is further complicated by battery supply issues following a recent immigration raid at a Georgia plant.

Key Points: US Tariffs Flip Prices Making Korean Hybrids Costlier Than Japanese

  • US cuts Japanese auto tariffs from 27.5% to 15% starting Tuesday
  • Korean cars still face 25% tariff amid stalled negotiations
  • Hyundai Sportage Hybrid could become more expensive than Toyota RAV4 Hybrid
  • Hyundai faces profitability squeeze as it minimizes price hikes
  • Battery supply disruptions compound challenges from Georgia plant raid
  • Hyundai-Kia hybrid sales grew 47.9% this year despite tariff barriers
2 min read

US tariffs could flip prices between Korean, Japanese hybrid cars

US tariff cuts make Japanese hybrids cheaper than Korean models like Hyundai, threatening their sales growth as Toyota and Honda dominate the hybrid market.

"The Sportage (USD 37,863) would end up more expensive than the RAV4 (USD 37,778) - Industry analysis"

New Delhi, September 15

Japanese cars could end up being sold at lower prices than South Korean cars, such as Hyundai Motor Co., in the American market when US tariffs on Japanese automobiles drop from 27.5 percent to 15 percent on Tuesday.

As per a report by Pulse, the English service of Maeil Business Newspaper Korea stated that the Korean vehicles, still subject to a 25 percent tariff amid stalled tariff negotiations between Seoul and Washington, could become more expensive than competing Japanese brands.

Citing the multiple sources from the automobile industry on Sunday the report noted that the Kia Sportage Hybrid currently sells in the United States for USD 30,290, while the Toyota RAV4 Hybrid sells for USD 32,850.

If both companies were to pass on the full tariff burden - 25 percent for Hyundai and 15 percent for Toyota - the Sportage (USD 37,863) would end up more expensive than the RAV4 (USD 37,778).

This leaves Hyundai little choice but to minimize price hikes at the expense of profitability.

Since Hyundai Motor Group produces most of its HEVs in Korea and exports them, it cannot avoid the 25 percent tariff barrier. While the auto giant does plan to build an HEV production line at its Hyundai Motor Group Metaplant America (HMGMA) in Georgia, the earliest completion date is sometime next year.

This presents a major setback for Hyundai's HEV sales growth in the U.S.

Hyundai and Kia's HEV sales, in fact, have been on a steep upward trajectory in recent years - 90,614 units sold in 2021, 124,191 in 2022, 183,541 units in 2023, and 222,486 units in 2024. From January to August this year, sales rose 47.9 percent on year to 198,807 units.

Industry insiders, however, agree that Hyundai cannot continue holding down prices if punitive tariffs remain in place.

According to Wards Intelligence, Toyota and Honda dominated the US HEV market with market shares of 51.1 percent and 17 percent, respectively, from January to August 2025. Hyundai and Kia ranked third with 12.3 percent.

Compounding challenges, Hyundai Motor is also facing battery supply disruptions after a US immigration raid at a battery plant co-owned by Hyundai Motor and LG Energy Solution Ltd. in Georgia.

- ANI

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Reader Comments

P
Priya S
Toyota has always been reliable but Hyundai's features are better for the price. Hope they resolve the tariff issue soon. The Creta and Venue are so popular here in India!
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Aman W
US protectionism affecting global auto markets again. Meanwhile in India, we're seeing more hybrid options from both Japanese and Korean brands. Good for consumers!
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Sarah B
The battery supply disruption mentioned at the end is concerning. Hyundai's electric vehicle plans in India could also face challenges if supply chain issues persist globally.
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Vikram M
Hyundai should accelerate their US manufacturing plans. They've been successful with 'Make in India' strategy - same approach needed for American market. Atmanirbhar works! 💪
N
Nikhil C
While the article focuses on US market, I hope Indian consumers benefit from increased competition between Japanese and Korean automakers here. More options, better prices! 🚗

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