Hyundai Motor's Second Quarter Profit Falls

Hyundai Motor reported a 21% drop in second-quarter operating profit on Thursday also falling short of analyst estimates. Weak vehicle sales, production disruptions and rising costs offset the benefit of a weaker won.

The world's third-biggest auto making group alongside affiliate Kia posted operating profit of 2.9 trillion won ($1.98 billion) below the 3.2 trillion won forecast by LSEG SmartEstimate. A fire at a supplier's factory in March added to production troubles during the quarter.

South Korean sales fell 16% as competition intensifies at home. Tesla plans to launch upgraded self-driving software in the country while China's BYD has overtaken Lexus and Volvo as the fourth-largest imported brand. Imported cars made up nearly a quarter of new registrations in the first half of 2026 highest in five years.

In the U.S. Hyundai's largest market by revenue, sales held steady but electric vehicles fell to just 4% of sales from 10.2%, after federal EV subsidies expired last year. The company raised incentives in the U.S. and Europe as buyers faced higher energy costs and inflation.

Revenue rose 2% to 49.2 trillion won. Hyundai is investing heavily in robotics, software-defined vehicles and autonomous driving to diversify beyond traditional car manufacturing. Last week, Hyundai Motor Group announced it would take full ownership of Boston Dynamics also planning to deploy Atlas humanoid robots at its Georgia plant from 2028.

Investor optimism about Hyundai's "physical AI" ambitions pushed its shares to record highs earlier this month still some analysts warn the rally may be outpacing near-term earnings. Shares rose 2% after the earnings report.