Aug. 26, 2025 | Hyundai adds $5 billion in U.S. investments; AN Congress preview

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Welcome to Daily Drive for Tuesday, August 26, 2025.

I'm Kellan Walker in Las Vegas.

Today on the show, Hyundai adds $5 billion in U.S. investments.

California dealers Sue Sonihonda over direct-of-fila sales and Stellantis shelves its Level 3 self-driving

program.

Plus, we're only a couple weeks away from Automotive News Congress in Detroit.

We'll hear from three of the scheduled speakers about everything from Chinese competition to

the state of the retail market.

You think about COVID and the supply shortage and higher interest rates and what's going

on with the Fed.

It's just been probably very daunting, or it is very daunting, I'd say, for the

consumer.

Let's run through all the news you need to know to keep up in the auto industry.

Hyundai Motor Group is adding $5 billion of investments to its U.S. operations.

The company says the infusion will substantially increase its production capacity for Hyundai,

Genesis, and Kia vehicles, while also creating a robot manufacturing hub.

The new U.S. commitment comes on top of some $21 billion announced in March, bringing the

South Korean car makers total to $26 billion from 2025 to 2028.

The California New Car Dealers Association is suing Honda and Sonih, accusing the companies

of violating state franchise laws.

The complaint alleges that the companies are bypassing Honda and Acura dealerships

to sell its Afila electric vehicle directly to consumers.

The 50-50 joint venture between the Japanese automotive and electronics giants began taking

deposits from California residents for the Afila One.

That's the first EV from the brand.

It's expected to arrive in early 2026.

And Stellantis has shelved its first Level 3 advanced driver assistance program.

That's according to three people familiar with the matter who spoke with Reuters.

They say the automaker made the decision because of high cost, tech challenges, and concerns

about consumer appetite.

As recently as February, Stellantis said its in-house system, which is part of the Auto

Drive program, was ready for deployment and a key pillar of its strategy.

The automaker confirmed to Reuters that it never launched the Level 3 software, but

it stopped short of saying that the program was canceled.

And those are today's headlines.

You can find more details on all those stories at AutoNews.com.

Now joining me to talk about two of our top stories of the day is our own Carly Schaffner,

who covers Hyundai, Honda, and other automakers for us at Automotive News.

Carly, welcome back to Daily Drive.

Thanks, Cal.

It's good to be back.

So let's start with this $5 billion additional investment in U.S. manufacturing by Hyundai

Group.

Is this investment surprising given the scale of it?

So earlier this year, Hyundai announced that they would be investing an additional $21 billion

into U.S. to expand their production footprint.

And that's in addition to the $12.56 billion they've already put into upgrading various

factories that they already have going to upgrade them for electrification and the

new meta plan outside Savannah, Georgia, which is now operating.

And that will build EVs and hybrids for all three of the Hyundai Motor Group brands, which

is Hyundai, Genesis, and Kia.

So the expanded investment is not a surprise, but it gives us a little bit more clarity

on what the $21 billion really is all about.

Because we know that they're going to put $6 billion into a steel mill in Louisiana.

And we know that they were going to expand the production footprint, which actually

included more capacity from the meta plant, which was initially planned from the start.

We just didn't know the timing on it.

But part of what they were earmarking was for studying advanced technology opportunities

and infrastructure development, like charging opportunities.

And one of the companies that they were planning to partner with was Boston Dynamics.

So now we know that this $5 billion, that's going to go towards robotics with Boston

Dynamics.

So they're going to make a factory or build a factory that can make 30,000 robots

a year.

And then they're going to have a manual capacity and was reported that they'll focus

on the atlas, the spot, and the stretch, which are the main Boston Dynamic products.

And then another highlight of it is that it'll create another 25,000 jobs.

So now moving to another company that you cover for us at Automotive News.

What case are dealers in California making that Sony Honda Mobility's plan to sell

a feel of vehicles directly to consumers violates franchise laws?

Yeah, so the California New Car Dealer Association, they had been investigating whether

or not a feel as plan.

So a feel is the brand that was created between this 50-50 joint venture between

Sony and Honda called Sony Honda Mobility.

So they created the Afeela brand.

Their first vehicle slated to come out mid next year is the Afeela one.

So they initially said that they were going to bypass dealers all together

and sell direct to consumers.

It's kind of a Tesla and right away, California, the dealer association started to

investigate whether or not that would violate the state franchise laws that says

that any affiliate of a car manufacturer needs to use their established dealer

network to sell vehicles that they cannot go direct to consumers.

And because the Afeela one is slated to be built at Honda's East Liberty

factory, they are arguing that that is a connection that makes them a direct affiliate.

So the lawsuit alleges in that way that they're violating the state franchise laws

and they're asking them to stop.

And also, this is the kind of third step in this or third chapter of the story,

if you will, because they sent them a cease and desist asking them to stop.

They were investigating them.

So it was an ongoing investigation.

So clearly their investigation found that they were working against what they thought

was outside of the lines of the law that's established.

And so now they filed the lawsuit.

Wow, interesting stuff.

Carly Schoffner covers Hyundai, Honda and other automakers for us at Automotive News.

Carly, thank you so much for joining me.

Thanks, Cal.

Coming up, three of our upcoming speakers for Automotive News Congress

talk about the state of the industry and competition from China.

That's next on Daily Drive.

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Welcome back to Daily Drive.

I'm Kellan Walker.

As you heard during the break, Automotive News Congress 2025 is coming up fast.

On September 11th, auto industry leaders will gather in Detroit

to talk about the biggest issues facing automakers, suppliers, and dealers.

Last week, we previewed some of those topics on a live stream

with three experts who are scheduled to speak at Congress.

Jennifer Safavian is CEO of Autos Drive America.

Michael Dunn is CEO of Dunn Insights.

And Jessica Caldwell is Assistant Vice President of Insights at Edmunds.

They spoke with our own Hannah Lutz and Lindsey Van Hulley

during the latest Congress Conversations live stream.

Here's a piece of the conversation.

Michael, I want to ask you specifically about China.

We understand that the two countries have agreed to extend the deadline by 90 days.

What should we expect by September when we have our live Congress event in Detroit?

Can you break down kind of the latest on what's happening with tariffs in China right now?

All right, big picture.

The United States has basically put up this giant billboard and said,

Chinese car is not welcome here.

I mean, currently, the tariff rates on imports from China

range from 125% all the way up to 147%.

And when I talk to Chinese automakers, they say, we get it.

We're not welcome in the United States, at least not exporting from China.

But China, meanwhile, has trained its sights on virtually every other market in the world.

So they have massive overcapacity at home, price wars at home.

No one's making money.

So they're shipping this year on track to ship more than 6 million cars

to over 100 countries worldwide.

Australia, UK up to 10% market share there.

EU as a whole over 5% overnight.

So we're seeing the tsunami of Chinese cars flooding into markets everywhere, except the United States.

And one wonders, how long can the US hold that fortress, hold off the Chinese?

That's the question.

How are the tariffs in China affecting the rest of the global auto industry now?

And how might they in the event that a trade deal ultimately is reached?

If we see a trade deal and who knows what shape that's going to take, but potentially,

I look for between the United States and China, not a reduction of the tariffs on imports from China,

but rather some deal where the Chinese agreed to invest in manufacturing here in the United States,

potentially in a joint venture.

Just as China told foreign automakers when they went into the Chinese market,

you want access to the market, you need to invest in manufacture here.

Look for the US to borrow from that playbook.

Keep tariffs high, but invite the Chinese potentially to invest here in the US.

So we know that China has been very strong in vehicle technology

and they're a big competitor to the US.

They're far ahead of the US when it comes to vehicle technology and EVs and software-defined vehicles.

Michael, what is that China apart there and what should we expect moving forward in the next few years?

They're really emerging as a dominant force along two dimensions.

The first is they utterly control batteries and battery supply chains.

Just to give you a couple of numbers,

China produces 70% of the world's batteries for electric cars

and they control 90% of the refining of the minerals that go into the manufacture of the battery cells.

So those are some serious choke points.

The world is dependent on China for batteries,

but a second and less well-known advantage they have is in technology, as you say.

So in the last five years, we've seen the emergence of companies like X-Pong, NIO,

most recently Xiaomi.

These are billionaire founders who made their money in technology

and have now entered the auto industry and say,

oh yeah, we know all about over-the-air updates in software.

We know how to start from scratch with a software-defined vehicle.

They move very quickly with advanced technology

and this is what's keeping people up at night in Wolfsburg and Nagoya in Detroit.

These new Chinese automakers are really advanced when it comes to technology and batteries.

Yeah, I know we covered that a lot for rare earths and tariffs and unlimited exports,

so a lot of reliance on China for sure.

Jessica, from your perspective,

are the consumers noticing that the Chinese vehicles are high-tech

and are they wanting that or are they not really in that sphere yet

to notice what's happening abroad?

I don't think they're noticing quite yet, but I will say I did a lot of traveling this summer

and this particularly in Australia, BYDs are everywhere.

You would think that that is one of the most popular car brands in the world.

If you look around, the sharks are like a very hot ticket there.

So it is weird to see other countries in which the Chinese manufacturers have come so hard in

and yet we see none of those vehicles here, obviously.

And I think from the consumer standpoint, I think maybe they're interested.

I mean, you have to be someone that probably is more into cars.

I'd say the average consumer, a lot of times people just buy the same exact car

that they've already owned, so it's not necessarily a thing where they're looking out to see what is.

But I think there is curiosity.

We know that there's affordability issues here in the United States.

They hear Chinese vehicles are cheaper.

How do we get a vehicle with better technology that I can actually afford now?

So I think that there is probably some interest.

I wouldn't say it's overwhelming because there is so much happening, I would say,

in the auto space in this market to think about even as a consumer right now.

Jessica, how is trade uncertainty overall impacting US vehicle sales so far,

you know, through the first half and into the third quarter?

Well, I mean, it's been really interesting.

I think when the news of the tariffs are coming out, I think we all probably remember those

like flashy headlines of people predicting car prices by the summer will be up 10,000.

I think I saw one for 25,000.

I was like, that's an impact.

So, you know, if you're just an average person out there thinking, oh,

I need a car in the next few months, I would probably panic.

So we did see sales higher during that time period.

People thought now or never, I have to go buy a car.

I may not want to, but I'm just going to go do it.

And then we saw sort of a pullback afterwards because it felt like the demand was pulled ahead.

And then last month we saw sales be pretty good because I think people are not

seeing those price increases necessarily materialized that they thought that they were.

They thought they'd be priced out of the market.

They're not necessarily seeing that.

So it is interesting.

I think the X factor as we move towards the latter half of 2025 is what we start

to see more price increases.

We know what the 2026 model year kind of on the horizon.

There's not too much yet in the market.

Like is that an opportunity for automakers to start to increase prices

of it to include some of their own losses?

We have seen a destination charges go up quite significantly.

I want to say the average is like $1,500 now, which is shocking to me.

I feel like destinations should be 700.

Not the case.

That could be another area in which we see kind of automakers shift some of the

cost onto the consumer.

So it's just these little things, I think, as we think about the rest of the

year that could change the dynamics for the consumer.

And obviously the more we talk about it and they think that there is

that perception that they're priced out, that doesn't help either.

You've talked about affordability a couple of times and I know that's

been something that's been sort of challenging for a while now.

And all the factors you've mentioned coming into play there.

I'm wondering, for you and for the other panelists as well, just kind

of what it all means for the consumer going forward, especially through

the end of this year?

I mean, it's tough.

I think we all recognize the high prices in every portion of our lives.

And for a lot of people, cars are a big purchase.

Maybe the biggest purchase that they are going to make.

And the other thing is people need them.

If you need a car, there's not really too many graces out there.

And the almost like the drug in this country has been low interest rates,

longer loan terms.

But when you have a new car interest rate that's on an average of over 7%,

that's tough.

Used vehicles, it's almost 11%.

So anyone that are buying these vehicles that are generally priced

well over $30,000, these are significant payments.

So it continues to be definitely a big issue.

People obviously paying high interest rates.

But also probably a lot of people getting we don't even see them in the market

because they either didn't qualify for a loan or just can't or just sort of

waiting for that moment.

Earlier this year, we saw older vehicles being traded in.

And that usually signifies that pent up demand is being released.

So people that have kind of set out thinking this market's crazy.

I'm going to wait.

And all of a sudden either cannot wait or think that it now is perhaps

a better time.

We started to see some of that.

But now they may be pulled back just because now this idea of tariffs and

higher costs and all of those things may be scaring those people out of the market.

But when you think about COVID and the supply shortage and higher interest

rates and what's been going on with the Fed,

it's just been probably very daunting or it is very daunting,

I'd say, for the American consumer.

Jennifer Safavian is CEO of Autos Drive America.

Michael Dunn is CEO of Dunn Insights.

And Jessica Caldwell is Assistant Vice President of Insights at Edmonds.

They spoke with our own Hannah Lutz and Lindsey Van Hully during the latest

Congress Conversations live stream.

You can find the full conversation on Automotive News, LinkedIn, Facebook,

and YouTube pages.

That's Daily Drive for today.

I'm Kellan Walker.

Thanks to Automotive News executive producer Jake Nier as well as our own

Carly Schoffner and Hans Grimel for their reporting for today's podcast.

You can get the latest news on retail, manufacturing investments,

and everything happening in the auto industry at AutoNews.com.

Come back tomorrow for a conversation with US Senate candidate Abdul El Sayed.

To build the future of Automotive, we are going to pivot and invest in

our industry in some really, really smart and targeted ways.

And I think we are going to do exactly what it is that China has done,

which is we are going to pump financial support into the industry.

And we are going to push the best automobiles in the world out onto the global market.

We'd love to hear from you.

Let us know what you think of the show and the topics we covered today.

Send us an email at dailydriveatautonews.com or leave us a voicemail at 313 or

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Aug. 26, 2025 | Hyundai adds $5 billion in U.S. investments; AN Congress preview

Hyundai Genesis

X9 Xpong

Byd Sharks

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