It’s been an exceedingly strange past two years for cars. Huge global growth of Chinese models, American tariffs impacting pricing and margins, and shifting environmental regulations have all done their part to tilt the table in all manner of ways. Hyundai seems to be feeling that right now. Operating profit and overall deliveries are down, but one of the few bright spots is the good ol’ U.S.-of-A.
Meanwhile, another Chinese car brand wants to come stateside, Toyota unleashes a pleasantly sensible off-road Sequoia, and we now know just how far the Volvo EX60 should go on a charge. Welcome back to The Morning Dump, where we puree this morning’s automotive headlines into a sort-of butternut squash soup of car news.
In The Margins
It’s about that time of year again when automakers release their second-quarter financial reports. This usually consists of rather dry Powerpoint presentations and video calls with investors, but in the strange year of 2026, there’s always news in the numbers. General Motors is on fire right now, having beaten earnings expectations for the 16th straight time in a row. Hyundai, on the other hand, isn’t seeing quite the same growth. Operating profit missed expectations, but it seems that the American market is doing a lot to cushion the blow. As Bloomberg reports:
Operating profit was 2.85 trillion won ($1.9 billion) for the three months ended June 30, down nearly 21% from a year earlier, the Seoul-based company said Thursday. That fell short of analyst estimates for 3.1 trillion won. Revenue rose about 2% to 49.2 trillion won, a record for the second quarter.
While a drop in operating profit was forecasted, missing the forecast by nearly $169 million isn’t great. So what happened? Well, a whole bunch of things coming together. Kicking things off, major factors include global competition from China and global economic fear.
“Prolonged geopolitical instability, including the Iran conflict, has heightened external uncertainty,” Chief Financial Officer Lee Seung Jo said in an earnings call. “China’s aggressive EV offensive is exerting a major impact on the growth of overall demand.”
However, those two factors alone don’t explain everything. American tariffs on high-margin Genesis models likely don’t help, and a deadly March fire in a plant that supplied Hyundai’s Korean engine factories with valves led to component shortages that impacted production. While a relatively weak Korean won should help export margins, it’s a double-edged sword. A weaker domestic currency usually makes it more expensive to source parts from overseas. Then there’s the current state of labor relations in Korea. Union negotiations are ongoing amid a partial strike, and signs of a swift resolution aren’t exactly clear.
Add it all up, and Hyundai’s global wholesale deliveries are down 6.9 percent year-over-year. That’s not-so-nice. Global retail sales are down about 4.2 percent, with two markets bucking the trend: India and America, up by 7.4 percent and 4 percent respectively. Obviously, these two markets have very different product mixes. Hyundai sells dirt-cheap models in India like the Creta and the Grand i10 NIOS that likely wouldn’t fly in America, but the current Venue and Elantra are still some of the most affordable new cars stateside, playing in a price bracket that many automakers have abandoned and many consumers need options in. Weirdly, Hyundai’s stock hasn’t taken a tumble on the news. It’s risen 3.35 percent today so far, partly thanks to hype around non-automotive projects like humanoid robots. Still, cars are Hyundai Motor’s bread and butter, and that puts the company in a strange spot.
Right now, things certainly aren’t catastrophic, but it seems that Hyundai needs America just as much as America needs Hyundai. In addition to affordable cars, local production plants and plans for further onshoring in a high-margin market should be mutually beneficial. Of course, a big part of that is because America’s car market is in a weird spot compared to the rest of the world. Legislation is working to keep Chinese cars out, but what if that changes in the future?
A Matter Of Time?
As it stands, Chinese EVs in America are essentially a no-go. Protectionist trade policies make the economics of importing most models unfeasible, but that doesn’t mean that some Chinese automakers aren’t waiting things out. Ward’s Auto recently interviewed Xpeng CEO He Xiaopeng, and the brand’s ambitions of coming to America should regulations change were rather clear.
He fully accepts the current U.S. position with regard to imports from China, but should the political situation change, the CEO said that Xpeng is happy to expand into the market.
“Well, I think that if the U.S. policy allows for companies like us to stay or enter the market and build factories there, definitely we’ll embrace that decision,” He told WardsAuto in an interview.
Of course, the biggest obstacles for Chinese automakers eyeing the U.S. market are legislative, both current and proposed. The current 100 percent tariff rate on imported Chinese EVs and phased-in connected vehicle legislation that for model year 2027, “Prohibits sales of connected vehicles by connected vehicle manufacturers owned by, controlled by, or subject to the jurisdiction or direction of China or Russia, and vehicles using their covered software” are concrete right now, but they could be bolstered by proposed legislation that would ban automakers with more than 15 percent Chinese ownership. As Reuters reports, it’s just moved through a Senate panel:
The U.S. Senate Commerce Committee approved legislation to toughen a U.S. government ban on Chinese automakers entering the American market that could potentially bar Mercedes-Benz from selling vehicles in the United States.
Senator Ted Cruz, the chair of the committee, warned that without changes, the bill’s provision that would ban companies with more than 15% ownership of Chinese entities would bar Mercedes-Benz from selling vehicles in the United States because of its nearly 20% Chinese investment. Senator Bernie Moreno said Mercedes-Benz would have until 2030 to comply and could still get waivers if needed.
The obvious catch here is that such protectionist legislation lives and dies by whoever’s in power at a given time. If the upcoming 2028 election results in changes that open things up for even local production of cars from Chinese brands, America’s roads might look much different than they do now. For now, Xpeng is looking at potentially entering the Canadian market, and thanks to similarities between Canada’s vehicle safety standards and America’s vehicle safety standards, adapting Canadian-spec cars for U.S. homologation would be relatively easy. For now, this all remains theoretical, but if trade restrictions open up several years down the line, Chinese cars in America would simply be a matter of time.
Locker’d, Not Loaded
As astoundingly large as full-size body-on-frame SUVs are these days, they still fill an important niche. If you need to say, pull a larger camper while toting around the whole family, a minivan probably won’t do the trick based on towing capacity alone. The Toyota Sequoia is now a veteran of the scene, having been on sale for 25 years and three generations, and it’s getting some minor upgrades for 2027 to keep up with the pack. The big one is an off-road focused Trailhunter version that’s actually surprisingly sensible.
Built on the entry-level SR5 model, the Sequoia Trailhunter gets Michelin all-terrain tires wrapped around bronze 18-inch alloy wheels, Old Man Emu suspension, skid plates, recovery hooks, a locking rear differential, and some electronic off-road gadgetry like Toyota’s Crawl Control. Nothing outlandish, but instead thoughtful touches for a spot of off-roading. Toyota hasn’t revealed pricing, but considering the Sequoia Trailhunter is based on the SUV’s most affordable trim, don’t be surprised if it’s priced far lower than the TRD Pro.
Of course, the Trailhunter package isn’t the only new addition to the Sequoia for 2027. Toyota’s biggest SUV has been subtly facelifted with a squarer grille sitting inside a new front bumper. New infotainment software including a built-in dashcam joins the party, the suite of active safety systems has been updated, and brighter fog lights aim to illuminate more of the night. Expect more details including pricing to surface this autumn, when the updated Sequoia is expected to roll into showrooms.
Home On The Range
The posh European electric crossover wars are still on like Donkey Kong, and Volvo is placing a lot of faith in its forthcoming EX60. Not only is it the marque’s first true electric compact crossover, it’s priced competitively with the gracefully aging XC60 plug-in hybrid and promises solid power, quick DC fast charging, and none of the UX foibles found in the recently-discontinued-in-America single-screen EX30. Now we now just how far the first models of EX60 will travel on a charge, and it’s not bad.
The cheapest P6 model on either 20-inch or 21-inch wheels is good for 307 miles on the EPA cycle. Selecting the 22-inch wheels shaves that number down to 295 miles. As for the all-wheel-drive EX60 P10, it’s rated at 330 miles of range on either 20-inch or 21-inch wheels, with that figure falling to 312 miles of range should you tick the box for the twenty-twos. On the one hand, those are rather respectable figures. On the other, the new BMW iX3 50 xDrive is rated for up to 434 miles of range with all-wheel-drive and 20-inch wheels, and the 400-mile mark is about the point where range anxiety becomes a distant memory. Granted, the BMW has a much larger battery pack—108 kWh to the 80 kWh pack in the EX60 P6 and the 91 kWh pack in the EX60 P10—and Volvo has a bigger-batteried EX60 incoming.
What I’m Listening To While Writing TMD:
I didn’t have new Chiodos on my bingo card for the week, but you know what? “TAPDAT” rips pretty well.
The Big Question:
If tariffs on imports, restrictions on Chinese vehicles, and the rollback of emissions standards hold, what do you think the American car market will look like in five years’ time? Ten?
Top graphic image: Hyundai
I wish Hyundai-Kia would make like a tree and leaf.
In 5 years automotive regulations will be unpresidentedly different.
Chinese imports MUST be permitted at low end of the market if affordability is to improve.
For many, range is not that big of a factor. Only for those who frequently travel hundreds of miles per trip should make that part of the decision-making.
Miles per kWh is the important statistic, as it can be used to determine the cost per mile.
And this can be compared among EVs as well as ICE/hybrids.
The Miles Per Dollar is the major comparison tool.
It requires:
If the Ioniq5 was at 75% scale so it’s an actual hatchback instead of a crossover masquerading as a hot hatch, I’d seriously consider getting one.
Yeah after seeing them in person I don’t think I would want one as they are more CUV/Van looking then hot hatch even though in pictures they look like a hot hatch. Compared to my Polestar 2 they are a bit bigger. Hopefully either a wagon or a smaller hatch back style EV makes it ways to the US well besides the R3 if it comes out though I just really don’t care for Rivians dash layout everything else about the R3 is cool though.
If I bought one I’d totally get XXL OMNI plates.
TBQ: Pretty much like what we have today.
To be honest if it was me in charge, I’d tell the companies I’ll keep up the protections but they have to sell two vehicle makes per brand for $20,000 out the door! And I get to approve of what models they are, and they can’t detrim them to save costs. Protectionism comes at a price and this is it.
kind of surprising to me at least that the GM product line is as profitable as it is. outside of the DFM free manual trans Caddy, and probably the Corvette in one form or another, nothing is really inspiring to buy and the quality perception is massively tarnished by the 6.2 v8 Debacle.
The aluminum plant fires, resulting shortages, and lower supply of F-150s has likely contributed the majority of the extra profit for GM. And I don’t think your average normie car/truck buyer is all that aware/concerned about the 6.2 issues, even owners.
You underestimate the margins on trucks.
And people happily pay it.
Trucks and SUVs, despite the Ford F series being the best selling pickup, GM still holds the largest market share in full sized trucks at 42% they also have the majority of the full sized SUV market captured. Corvettes and Cadillac sedans are fun but not where the profits are really made.
Even that F series being best selling is only because Chevy and GMC trucks are listed separately. Together, they sell more than F series. I consider it reasonable to view them as essentially the same vehicle, though some might disagree.
TBQ: we’ll continue to drive oversized and overpowered vehicles while simultaneously bemoaning our lack of ‘energy independence’.
The US has been a net exporter of oil since 2019.
And yet most of the fuel we use comes from oil imported from Saudi Arabia, Canada and Mexico.
Because not all oil is the same. Sweet Crude gets exported while Heavy Crude, which is what our refineries are set up for, is imported.
No, a majority of domestically refined gasoline is from domestic oil. A significant minority is from imports, for the reason you describe, but it is not “most”.
https://www.domesticoperating.com/blog/2026/04/20/where-the-us-gets-its-oil-and-gas-from/
I stand corrected – 40% isn’t most.
https://www.artberman.com/blog/america-has-plenty-of-oil-just-not-the-right-kind/
TBQ – If the policies of the current administration hold, in 5-10 years I would hope to see a return of the mid-2000’s with regards to reliability and longevity. No more CVTs (except eCVTs), cylinder deactivation, engine stop/start, small displacement turbo engines in large vehicles, 0W-16 oil, etc. Just an honest return to properly sized NA engines with 5 or 6 speed automatics without techno-trickery to make the MPG look better on the EPA test.
It will look mostly like it does now, but with modest and gradual improvements to fuel economy pretty much across the board.
Sorry to be boring, but I don’t think there’s some large unmet demand for a type of vehicle that isn’t currently sold here, and I think incremental efficiency improvements will continue to be demanded by consumers. Hybrids and plug-ins will become more common as buyers get used to them. EVs will hold onto their niche, but won’t radically expand market share without paradigm shifts in range per dollar calculus. The rollback of emissions standards might allow for a few oddball and daring offerings to appear that might otherwise have been no-goes, but the overall marketplace would stay about the same.
Assuming nothing else changes I’m inclined to agree with this, although I might be slightly more bullish on EVs – I think they’ll expand their market share, but not necessarily radically, from a combination of minor factors (drivers getting used to the idea of mostly/fully-electric cars, increased visibility of charging, penetration into the secondhand market, etc.). But it would be a slow shift, not at all a radical one.
On the other hand, “nothing else changes” feels like a big assumption to make over a five-year period, let alone ten. Whatever we think things will be like ten years from now, I’d be more willing to bet that we’ll be wrong than that we’ll be right.
Why is no one mentioning the decrease in battery costs. It’s been going on for years now, and is allowing EVs to be more cost competitive with ICE vehicles than ever before. They’ve been averaging something like an 5-10% annual drop in cost per kWh for the past 15 years, and are projected to continue to do so.
What other car component do you know that is actually decreasing in price? Not engine blocks. Not tires….
I’m not saying I expect EV sales to explode in the US. I don’t. But I expect them to return to their previous trend they were on before Trump eliminated incentives, within the next year or two. I expect the increase in EV market share will be larger than any increase in ICE/HEV average fuel economy numbers.
I had a Hyundai from the era of recalls, easy thefts (leading to high insurance rates), and multiple recalls. They’d have to do a lot to win me back.
It’s interesting what Hyundai will do near-term. They’ve cut exports from those facilities but are balancing it with increased product mix within the US.
But imported models from Korea, as they are hit only once on import
taxesduties rather than the multiple times, plus increased domestic profiteering under the guise of tariffs and reduced competition, on domestic produced components.