Hyundai Motor is exploring plans to expand annual production capacity at its new plant in Georgia to as much as 800,000 units. The tariff policies of the Donald Trump administration are seen as a key factor accelerating the push toward local production.

José Muñoz, president and CEO of Hyundai Motor, said in a CNBC interview on the 20th (local time) that the company is reviewing plans to increase capacity at Hyundai Motor Group Metaplant America (HMGMA) from the currently planned 500,000 units per year to between 700,000 and 800,000 units by 2028. That would represent up to a 60% increase over the original plan.

“The U.S. is the most important market in the world for us, excluding Korea where our headquarters is located,” Muñoz said. “We need to add more capacity for that.” He added, “The goal is to have all facilities operational by 2028,” explaining that the company plans “to produce a variety of models and hire thousands of additional workers.”

The capacity expansion review is part of Hyundai Motor Group’s plan to invest a total of $26 billion (approximately 36 trillion won) in the United States by 2028. Hyundai has set a goal of producing more than 80% of vehicles sold in the U.S. locally by 2030. As of 2024, the local production ratio stood at roughly 40%.

Muñoz directly acknowledged that the Trump administration’s tariffs are pulling forward the localization strategy. “Tariffs are helping us accelerate our localization plans. It’s a very simple matter,” he said. “The good thing is we already started before tariffs were announced. In a way, tariffs are accelerating it.”

If capacity expands as planned, HMGMA is expected to surpass Tesla’s and Toyota’s U.S. plants to become the largest single automotive assembly facility in the United States by production capacity.

The Georgia Metaplant: Present and Future

The Georgia Metaplant has steadily grown in scale since Hyundai first announced investment plans in 2022. The current investment totals $7.6 billion (approximately 10.5 trillion won). Completed last year, the plant serves as a production hub for Hyundai, Genesis, and Kia electric vehicles and hybrids, currently producing the Ioniq 5, Ioniq 9, and Kia Sportage Hybrid, among others.

Beyond the Metaplant, Hyundai is also reviewing additional investments to secure production capacity for body-on-frame vehicles such as trucks and SUVs. Muñoz did not disclose specific details.

A Hyundai Motor official said, “We are continuously evaluating demand and market conditions to determine opportunities for increasing U.S. production,” adding, “We are reviewing capacity expansion, but there is nothing to announce at this time.”

U.S. Market Share Growth and Production Localization

Hyundai Motor Group has steadily expanded its U.S. production base. Hyundai operates an existing plant in Alabama, and South Korea’s Kia (000270.KS) also has a plant in Georgia.

According to U.S. market research firm Mobility Global, Hyundai Motor Group’s U.S. market share expanded from 8.4% in 2020 to 11.2% last year. If the capacity increase materializes, Hyundai’s U.S. strategy is expected to shift more rapidly beyond sales growth toward significantly raising the local production ratio.

The Georgia plant’s capacity expansion is also expected to enhance flexibility in shifting production between EVs and hybrids. Depending on changes in U.S. EV demand, the company can adjust the production mix between pure EVs and hybrids, reducing the risk of equipment idling due to weak demand for a particular powertrain.

If the expansion review is confirmed, it is expected to be recorded as a representative case of the Trump administration’s tariffs driving production reshuffling among global automakers. The 15% tariff applied to South Korean imports is increasing the economic incentive for local production expansion.

Key challenges for Hyundai include whether the expanded capacity can translate into actual sales growth, and whether the company can maintain capacity utilization and profitability amid large-scale capital expenditures. Additionally, the production increase could trigger follow-on investments in Georgia by battery, parts, and logistics suppliers.