Hyundai is moving the Tucson hybrid from Korea to Montgomery.
Hyundai Motor Company President and CEO José Muñoz said Tuesday the automaker will invest “about half a billion dollars” at its Alabama manufacturing facilities to build new engines, hybrid components and an extended-range electric powertrain, according to Automotive News.
Muñoz made the announcement during a fireside chat with Automotive News Publisher KC Crain at the 2026 Automotive News Congress in Detroit.
“We are bringing Tucson hybrids to Alabama, and then we will bring also the Santa Fe,” Muñoz said.
The Tucson is Hyundai’s top seller in the United States and the hybrid version sold here today is assembled in Korea. Building it in Montgomery lets Hyundai sidestep the 15% tariff on Korean-built vehicles. Every car that rolls off the Alabama line is exempt.
A Hyundai spokesman confirmed the money will fund development and production of new engines and an extended-range EV powertrain for vehicles built in North America, to be used in the upcoming Santa Fe and Tucson crossovers.
Muñoz said in August the Santa Fe EREV will be built in Alabama and arrive in the first half of 2027 with “more than 600 miles of range.” The redesigned 2027 Tucson and Tucson Hybrid land in the fourth quarter.
Muñoz said the size of Hyundai’s U.S. investment makes the company “more American than a lot of the American OEMs.”
“We’ve improved dramatically in terms of … much better quality. I think now we are ready for the next challenge. We have committed as part of our strategy to invest in America,” Muñoz said. “The U.S. has always been the most important market for us.”
Hyundai Motor Manufacturing Alabama is the company’s first U.S. assembly plant and Montgomery County’s largest manufacturing employer at about 4,200 workers. Roughly 40% of every Hyundai sold in the United States is built in Montgomery, and the plant makes its own engines on site.
Tuesday’s announcement extends a run of Alabama spending.
Hyundai invested $388 million in a Montgomery engine-head plant in 2018, $410 million and 200 jobs for the Santa Cruz line, and $290 million in 2023 to retool for the fifth-generation Santa Fe.
Governor Kay Ivey called the 2018 engine expansion “a strong testament to the company’s confidence in its Alabama operation and in its highly skilled workforce.”
The Alabama outlay is part of the $26 billion Hyundai pledged in 2025 to invest in the United States through 2028. Hyundai plans to add 500,000 units of annual North American capacity by 2030 and is pushing local parts sourcing to 80%.
Hybrids are carrying the company. Hyundai’s U.S. hybrid deliveries rose 33% in August and made up a record 29% of all U.S. sales as gas prices climb and EV demand fades.
CNBC reported last week that Hyundai is expected to outsell Ford in the United States in the third quarter, in large part because Detroit does not have the hybrid lineup Hyundai does.
Muñoz said Hyundai is also “ready to compete” in body-on-frame trucks and SUVs, a market the Detroit 3 have owned for decades.
Asked how he wants Hyundai viewed a decade from now, Muñoz said: “I hope we would be recognized by consumers for very good quality, very good safety, very good reliability, but I hope we would be recognized as part of the American dream.”
Grayson Everett is the editor in chief of Yellowhammer News. You can follow him on X @Grayson270.
