Hyundai Motor Group is making preparations for potential U.S. measures against vehicles connected to China. The South Korean automaker is diversifying its parts supply chain outside of China and is also involved in lobbying efforts in the United States.
According to Lee Ho-geun, an automotive engineering professor at Daedeok University, Hyundai Motor and Kia need to decrease their reliance on China and expand their supply chains to other countries like Vietnam. He warned that there is a possibility that the U.S. will regulate vehicles equipped with Chinese parts, which could have a serious impact on Korean automakers.
Therefore, efforts should be made to reduce the proportion of Chinese parts in their automobiles. The Hyundai Motor Group—which encompasses brands such as Hyundai, Kia, and Genesis—is getting ready for potential regulations in the United States that would limit Chinese-connected vehicles in the country.
In February, the Biden administration launched an investigation into whether Chinese vehicle imports pose a national security risk. The United States has taken a strong stance on imports of Chinese electric vehicles (EVs).
Recently, the Biden Administration increased tariffs on Chinese EV imports by over 100%, believing that China is attempting to avoid tariffs and other regulations by producing electric vehicles in Mexico and importing them into the United States.