Scale-up announced Wednesday at Montgomery factory
Hybrid, EREV powertrain facilities to be expanded
Santa Fe EREV local production set for 2027
Cumulative US investment to reach $2.2 billion
![Hyundai Motor and Alabama state officials pose for a photo at an investment ceremony held Wednesday at the automaker's Montgomery, Alabama factory. Hyundai Motor plans to invest approximately $450 million to expand production facilities for hybrid and extended-range electric vehicles. [Alabama Department of Commerce]](https://wimg.heraldcorp.com/news/cms/2026/10/29/news-p.v1.20261029.e3a396069728422bb69019f6f03b2420_P1.jpeg)
Hyundai Motor will invest approximately $450 million in its Alabama factory to expand production facilities for the Tucson hybrid and the Santa Fe extended-range electric vehicle (EREV).
According to the Alabama state government and local media, Hyundai Motor Manufacturing Alabama (HMMA) held a large-scale investment ceremony at its Montgomery factory Wednesday (local time) and announced plans to expand its production facilities.
Alabama Governor Kay Ivey, state and Montgomery city officials, and Hyundai Motor's local management attended the event.
The core of the investment is expanding engine production capacity and upgrading facilities to support new electrified powertrain manufacturing.
Hyundai Motor plans to increase the Alabama plant's engine output while upgrading equipment to accommodate hybrid and EREV technology. The work will transform a factory centered on internal combustion engine vehicles into a hub capable of handling vehicles with multiple powertrain types.
An EREV uses an electric motor as its primary drive source while employing an internal combustion engine as a generator to extend driving range. Unlike a pure battery electric vehicle, it can generate electricity through the engine in addition to charging the battery, making it well suited for long-distance travel.
The finished-vehicle assembly line will also be reconfigured. The Alabama plant is set to be retooled to produce the newly designed next-generation Tucson and a refreshed Santa Fe.
The new Tucson is also planned for local hybrid production. Localizing production of the Tucson hybrid — previously manufactured in South Korea and exported to the United States — is seen as a move to reduce tariff exposure and respond more flexibly to North American market demand.
The investment plan extends the US production expansion strategy Hyundai Motor outlined earlier.
Hyundai Motor President and CEO Jose Munoz said at the 2026 Automotive News Congress in Detroit in September that the company would invest approximately $500 million in the Alabama plant and pursue US production of the Tucson hybrid.
Hyundai Motor also disclosed at its 2026 CEO Investor Day in August that it plans to launch the Santa Fe EREV in the first half of next year and produce it at the Alabama plant.
The Santa Fe EREV is being developed to travel more than 600 miles (about 965 kilometers) on a single charge and fill-up by combining an engine with an electric motor. Hyundai Motor intends to expand its North American eco-friendly vehicle lineup through models including the new Tucson hybrid and the Santa Fe EREV.
HMMA Chief Operating Officer Mark Reider said at the ceremony that the investment "will support new vehicle production, expanded engine manufacturing capabilities and the introduction of advanced propulsion technology, providing customers with more choices and flexibility as the automotive industry evolves."
"Above all, this investment represents trust — trust in this plant, our employees, our supplier network and the state of Alabama," Reider added.
The expansion will also create local jobs. The new investment project is expected to generate 53 full-time positions, with an average hourly wage of $30.03, equivalent to an annual salary of approximately $62,467.
HMMA currently employs about 4,200 workers. Once the investment is complete, Hyundai Motor's cumulative investment at the Alabama plant since vehicle production began there in 2005 will reach approximately $2.2 billion.
The Alabama plant is Hyundai Motor's first finished-vehicle production base in the United States. It currently produces the Tucson, Santa Fe, Santa Fe Hybrid and Santa Cruz, and is set to expand its lineup to include next-generation vehicles.
The economic impact on the local community is also significant. According to the Alabama state government, the annual economic ripple effect generated by HMMA and its suppliers exceeds $5 billion.
Tax revenue from the Hyundai Motor plant is estimated at approximately $100 million per year for the state government and more than $12 million for local governments. Over the past four years, Hyundai Motor has donated approximately $1 million annually to local charities, public schools and community improvement projects.
Governor Ivey said Alabama and Hyundai Motor are "one team with a successful partnership," adding that the major investment "will strengthen Hyundai's automotive production line and take our partnership to the next level."
Alabama Commerce Secretary Ellen McNair said the investment "will strengthen manufacturing capabilities, support the development of advanced automotive technology and help develop the workforce needed to produce next-generation vehicles."
Montgomery Mayor Steven Reed called Hyundai Motor's investment "an important partnership that has transformed Montgomery's economy over the past two decades" and expressed hope that it would create more opportunities for local residents.
Meanwhile, Hyundai Motor is also accelerating the expansion of its US production facilities beyond the Alabama plant, including at Hyundai Motor Group Metaplant America (HMGMA) in Georgia. The company plans to add 500,000 units of annual production capacity in North America by 2030 and raise the local parts procurement rate to more than 80 percent.
kwater@heraldcorp.com
