Hyundai to expand hybrid lineup in US to offset tariffs, target Toyota

Hyundai Motor Group plans to roll out hybrid models across its entire US lineup by 2026. With its hybrid models, Hyundai aims to cushion profitability from tariffs while narrowing the gap with Toyota.

Hyundai’s hybrid plans in the United States begin with the launch of a hybrid version of the all-new Palisade SUV later this year. The hybrid Palisade delivers 334 horsepower with Hyundai’s next-generation hybrid system. Kia will follow with hybrid versions of the Telluride and Seltos next year.

Broader hybrid strategy targets strong US demand

Hyundai’s expanded lineup in the West could soon include hybrid trims of the Kona and Venue, providing the South Korean automaker with coverage across every major US segment for the first time. The automaker already sells hybrid variants of the Niro, Sportage, Tucson, Elantra, Santa Fe, Sonata, Sorento, and Carnival.

The company’s hybrid demand remains resilient, with US sales up 42% year-over-year in the first half of 2025 to 1.01 million units. The Group’s Hyundai and Kia brands sold 164,913 hybrids in the first seven months, a 46% jump from last year.

Tariffs and competition shape Hyundai’s hybrid push

According to KED Global, Hybrids sell at a premium of about 10% over gasoline models, helping offset losses from the US government’s 15% levy on imported vehicles that dented Hyundai’s Q2 profit. Large SUVs are especially profitable, making the Palisade and Telluride hybrids critical in maintaining margins.

Hyundai also faces stiff competition from Toyota, which dominates the US hybrid market with a 54.9% share. To meet demand and mitigate import risks, Hyundai is considering hybrid production at its new Georgia Metaplant, which is capable of producing 500,000 vehicles annually.

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