Hyundai Motor Co. is revisiting its plans to build an Electric Arc Furnace (EAF) steel mill in the United States to support its North American operations. This development comes as the South Korean automaker looks to bolster its local steel production capabilities for vehicle manufacturing.

Hyundai’s Commitment to North American Production and EAF Steel Mill

Hyundai is actively exploring the construction of a flat-rolled electric arc furnace (EAF) steel mill in the United States. During a January earnings call, a Hyundai executive confirmed the company’s interest in this project. While the plan remains unconfirmed, Hyundai is seriously evaluating the investment.

A Hyundai spokesperson stated that the company is considering the mill’s construction. However, they did not provide additional details. Reports indicate the U.S. Southeast is a potential location. This region already hosts several recycled-content EAF mills. Therefore, it presents a favorable option for Hyundai.

The proposed steel mill would support Hyundai’s expanding U.S. manufacturing presence. This includes plants in Alabama and Georgia. These plants collectively produce over 700,000 Hyundai and Kia vehicles annually. Furthermore, Hyundai is developing the Hyundai Motor Group Metaplant America (HMGMA). This facility will be Hyundai’s first full EV manufacturing plant in the U.S. It will have the capacity to assemble 300,000 electric vehicles per year.

Steel Mill Investment Linked to U.S. Tariff Policies

Hyundai’s decision to build the EAF steel mill in the U.S. is also influenced by U.S. tariff policies, especially those considered during the Trump administration. The automaker, which currently relies on South Korea for all of Hyundai Steel’s melt shop capacity, is keen on reducing dependency on overseas steel production. This move could help mitigate potential trade-related risks and ensure a more reliable, cost-effective supply of steel for its U.S. operations.

In March 2024, Hyundai set up a committee to explore the feasibility of investing in steelmaking capacity in the U.S., reflecting the company’s long-term strategy to enhance its local supply chain and production efficiency.