Hyundai Motor Company has announced that it plans to invest US$ 500 million in its Alabama plant in the US to produce hybrid powertrains and vehicles, as the South Korean automaker looks to strengthen its US manufacturing base and reduce its exposure to US import tariffs.

The company’s CEO, Jose Munoz, announced the additional investment at the recent Automotive News Congress in Detroit, which will allow the company to produce the all-new Tucson Hybrid SUV at the plant, followed by an extended-range electric (EREV) version of the Santa Fe SUV.

The Montgomery plant in Alabama plant currently only produces internal combustion engine (ICE) versions of the Tucson, while all current Tucson Hybrid models sold in the US are imported from South Korea. The new investment in the Alabama plant will support the development and production of next-generation hybrid powertrain systems for the all-new Tucson Hybrid, including engines and hybrid components, as well as EREV powertrains.

Hyundai last week unveiled the all-new Tucson at an event in New York, having previously released previews of the model. The new Tucson Hybrid, powered by a 1.6L turbocharged engine, has a fuel consumption of 42 mpg and a maximum combined power output of 233 hp. The new model will also be available as a plug-in hybrid electric vehicle (PHEV) in other global markets, but not in the US.

The Tucson is Hyundai’s best-selling SUV model in the US, with some 182,000 units sold in the first nine months of 2026. The automaker reported a 3% rise in total sales in the US to 697,464 units year-to-date, helped by the growing popularity of hybrid models following the recent surge in fuel prices in the country.