Weekend overtime shifts have disappeared from the electric vehicle production line at Hyundai Motor’s Ulsan Plant. Since the beginning of this year, there have already been eight instances of partial shutdowns, during which operations were halted for several days.
Some analysts attribute this to the prolonged “EV chasm,” a temporary stagnation in demand for electric vehicles. However, unlike in Korea, production volume in the United States is actually increasing. This has led to a growing consensus that the phenomenon of “manufacturing hollowing-out,” where domestic production capacity shifts overseas, is beginning to take hold.
Hyundai Motor Ulsan Plant Weekend Overtime Disappears, Only 8 Shutdowns US Plants Running at Full Capacity... Rapid Expansion of Overseas Production Share Manufacturing Hollowing-Out Accelerates Due to Tariff Barriers and Export Slumps Possibility of Hybrid and Internal Combustion Vehicles Also Moving Overseas Emerges
According to the automobile industry on November 4, Hyundai Motor did not schedule any weekend overtime shifts this month for Line 12 of Ulsan Plant 1, which produces the Ioniq 5 and Kona Electric.
This stands in contrast to Ulsan Plants 2 through 5, which have been conducting overtime shifts every Saturday this month, except for November 8, when the National Workers’ Rally is scheduled. These plants primarily produce internal combustion vehicles such as the Santa Fe, Palisade, Avante, and Tucson.
Line 12 has rarely operated weekend overtime shifts this year. Since February, shutdowns have become frequent, with the line ceasing operations from October 29 to 31. It is also reported that “pitch-downs,” or reductions in hourly production rates, are being implemented regularly. As a result, Ioniq 5 production in the first to third quarters of this year dropped to 33,967 units, nearly half of the 70,943 units produced during the same period last year.
During this period, domestic sales actually increased. From January to September, Ioniq 5 domestic sales rose 9.1% year-on-year to 12,310 units.
The decline in production can be traced to exports. During the same period, exports stood at 24,479 units, a sharp 61.9% drop from the previous year. This is one of the reasons behind concerns of domestic production hollowing-out.
Notably, overseas production of the Ioniq 5 has surpassed domestic output. This is largely due to the surge in production at Hyundai’s U.S. facilities, a key market for the Ioniq 5.
At Hyundai Motor Group Metaplant America (HMGMA) in Georgia, which began full-scale operations this year, 39,467 units of the Ioniq 5 were produced in the first to third quarters, exceeding the output of the Ulsan Plant. This accounted for the majority of the 41,090 Ioniq 5 vehicles sold in the United States during the same period.
Concerns Grow Over Manufacturing Hollowing-Out Amid Export Slump and Trump Tariffs
Industry insiders point out that the reduced operating rate of Ulsan Plant 1’s electric vehicle line should be seen as part of a broader trend of “manufacturing offshoring” rather than simply a slump in EV sales. U.S. tariff barriers have further accelerated this trend. Since the imposition of tariffs in the United States, Hyundai Motor Group has continued to expand local production there.
There is increasing likelihood that manufacturing hollowing-out will extend beyond electric vehicles to include hybrids and internal combustion vehicles. In September, Hyundai’s Alabama plant achieved its highest monthly output of the year at 35,371 units, a 52% surge compared to 23,251 units in January. In particular, production of the Santa Fe hybrid electric vehicle (HEV) nearly tripled from 2,325 units to 6,974 units.
HMGMA’s production capacity is also set to expand to 500,000 units annually by 2028. At the New York Investor Day in September, Hyundai Motor President Jose Munoz announced plans to increase the share of U.S. production from the current 42% to 80% by 2030.
Hyundai is not only increasing exports from its plants in China and India to third countries, but is also building a new plant in Saudi Arabia targeting the Middle Eastern market. All of these facilities have the potential to replace domestic production.
While Hyundai has stated its intention to assign new models to domestic plants to offset the increase in overseas production, the future utilization of Ulsan Plant’s Line 12 remains undecided. A Hyundai union official said, “Preparation is necessary to produce hybrids or other models instead of electric vehicles,” adding, “There are no concrete discussions underway yet.”
Experts warn that the case of the Ulsan Plant could mark the beginning of an accelerated manufacturing hollowing-out phenomenon. In Germany, a leading automotive nation, increased local production in China led to sluggish sales, resulting in the loss of approximately 51,500 jobs in the German auto industry over the past year, according to a report by Ernst & Young.
Lee Hanggu, a research fellow at the Korea Automotive Technology Institute, commented, “With the rise of protectionism such as tariffs, not only Hyundai but global automakers are structurally compelled to expand overseas production to secure global supply chains. Policy support is needed to maintain domestic production by boosting domestic demand through purchase subsidies.”
