Hyundai and other auto giants race to adapt to Trump’s policy shifts

The global auto industry is bracing for sweeping changes as Donald Trump’s second term signals a return to policies favoring internal combustion engines, higher tariffs, and an “America First” agenda. /Chosun DB

As Donald Trump gets ready to start his second term as president, the global auto industry including South Korea is moving quickly to adapt. The focus on internal combustion engines, higher tariffs, and an “America First” agenda has become increasingly clear.

Hyundai Motor was the first to act, naming its first-ever foreign CEO, and on Nov. 19, Volkswagen Group followed by appointing a former Rivian executive to lead its North American operations, signaling a more U.S.-focused strategy. Meanwhile, General Motors (GM) is cutting staff, and Stellantis has decided to delay the launch of a new electric vehicle (EV). Japanese automakers are expected to stick to their strengths in hybrids, taking a wait-and-see approach.

Trump’s push to roll back EV mandates is already taking shape. According to Bloomberg on Nov. 19, his administration is reviewing the fuel efficiency standards planned for internal combustion engine vehicles.

Previously, the Biden administration had set ambitious targets, requiring vehicles to achieve roughly 21 kilometers per liter (about 13 miles) starting in the early 2030s as part of its push for EV adoption. Trump’s team is working to undo these measures, potentially raising annual greenhouse gas emission allowances for new cars and light trucks. On Nov. 14, it was also reported that the administration is considering repealing the Inflation Reduction Act (IRA), which provides subsidies for U.S.-made EVs.

Therefore, major automakers are adjusting quickly to Trump’s policy, recognizing the growing importance of the U.S. market. In China, local players like BYD are dominating, while Europe faces prolonged economic challenges due to the fallout from the Russia-Ukraine war. For many global automakers, the U.S. is becoming an increasingly crucial market as opportunities elsewhere shrink.

On Nov. 19, Volkswagen Group announced that Kjell Gruner, a former Rivian chief commercial officer and CEO of Porsche North America, will take over as CEO of its North American operations. Gruner is widely recognized for his deep understanding of the U.S. market and the EV landscape.

Volkswagen has faced challenges in the U.S., with its EV sales dropping around 15% in the first half of the year. The company believes the new leadership would bring flexibility and resilience in uncertain times as it braces for a potentially volatile EV market under Trump’s administration.

Hyundai Motor Group Chairman Chung Eui-sun (center) stands as Chang Jae-hoon (left), then-president, and José Muñoz (right), then-president and COO, sign a memorandum of understanding (MOU) with Georgia Institute of Technology for future mobility collaboration in Sept. 2023. On Nov. 15, Hyundai Motor Group announced promotions, elevating Chang to vice chairman and appointing José Muñoz as CEO. /Hyundai Motor Group

Hyundai Motor is also making moves to align with the U.S. market. The company recently promoted José Muñoz, a U.S. citizen and head of its Americas operations, to CEO. It also brought on Sung Kim, a former U.S. ambassador to Indonesia during Trump’s first term, as an executive advisor.

Some companies in the industry are also downsizing as part of restructuring efforts. On Nov. 14, GM announced plans to cut about 1,000 jobs globally to offset losses in its EV business. “To win in a competitive market, we need to optimize speed and excellence,” a GM spokesperson said.

The shifting EV policy landscape in the U.S. is prompting automakers to rethink their strategies. Trump’s strong opposition to EV mandates has led many companies to focus on transitional models, such as hybrids, and delay their EV launches.

Stellantis, for example, has postponed the release of its electric Ram pickup truck from this year to early 2024. At this month’s Los Angeles Auto Show, the company plans to unveil a new platform designed to support electric, hybrid, and internal combustion engine vehicles.

Ford, meanwhile, canceled plans to produce a three-row electric SUV this year, instead shifting its focus to hybrid models. The company also announced it would reduce its EV investment from 40% to 30%.

However, Tesla CEO Elon Musk has expressed optimism about Trump’s policies, particularly the potential repeal of the IRA, which he believes could hurt EV startups that depend heavily on subsidies more than established players like Tesla.

[Lee Young-kwan]

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