The United States could experience a sharp influx of Chinese-made and Chinese-branded vehicles similar to the disruption already unfolding in parts of Europe unless Washington maintains tariffs and other restrictions on market access, Hyundai Motor CEO Jose Munoz has warned.
Munoz said the rapid expansion of Chinese automakers in Europe provides a warning for the U.S. market, where manufacturers such as Hyundai and Volkswagen have faced growing pressure from lower-priced competitors.
Chinese automakers have gained market share in Europe by selling vehicles at substantially lower prices than many established brands. Munoz said Chinese vehicles can be 30% to 40% cheaper than competing models in markets including Italy, Spain and France.
The price advantage has persisted despite trade measures introduced by the European Union. Brussels imposed tariffs or minimum pricing commitments on Chinese-built electric vehicles after concluding that they had benefited from unfair state subsidies.
Britain, which left the European Union in 2020, has not adopted comparable tariffs on Chinese electric vehicles.
“The UK, which in the past was a very profitable, very strong market, has become like China,” Munoz said in San Jose, California. “All the top sellers are Chinese because there are no barriers.”
Munoz said the U.S. could experience a similar development if Chinese manufacturers gain broader access to the American market without additional safeguards.
“So I think we could expect similar things to happen in the US, at different levels, unless there are certain conditions,” he said, referring to measures such as European tariffs and other market-access requirements.
Chinese brands expand rapidly in Europe
The growing presence of Chinese automakers has already altered the competitive landscape in Europe.
Chinese-branded vehicles accounted for more than 9% of new-car sales in the European Union during the first half of this year, according to data from the European Automobile Manufacturers' Association.
In Britain, Chinese brands represented 15% of new-car registrations, according to data released earlier this year by the Society of Motor Manufacturers and Traders.
European policymakers are now considering additional measures to encourage domestic production. Brussels is working on “Made in Europe” rules that would establish minimum local-content requirements for electric vehicles sold within the bloc.
Such rules could encourage Chinese automakers to establish manufacturing facilities inside Europe rather than rely primarily on vehicles imported from China.
Munoz said Washington would need to establish its own conditions if it wants to limit the impact of Chinese competition.
The U.S. currently effectively keeps Chinese electric vehicles out of its market through tariffs of about 100%.
Munoz said Chinese companies could nevertheless eventually become a competitive force in the United States.
“The US needs to impose conditions on Chinese companies ‘to be able to minimize the impact.’”
“But the impact is going to be there for sure,” he said.
President Donald Trump said in an interview with Fox News last week that he would welcome Chinese automakers if they built vehicles in the United States, potentially opening the door to a different form of competition based on domestic manufacturing.
Hyundai executive impressed by China's auto industry
Munoz's concerns come alongside an acknowledgment of the rapid technological progress made by China's automotive industry.
The Hyundai CEO previously ran Nissan's China operations roughly a decade ago, giving him firsthand experience of the country's auto sector.
He said China's progress since then has been striking.
“The level of innovation, the level of improvement, the technology is unbelievable,” he said.
His comments echo warnings from executives at major U.S. automakers that Chinese manufacturers could eventually attempt to establish a stronger presence in the American market.
Ford CEO Jim Farley told employees in July that the company was preparing for the possibility of Chinese automakers entering the U.S. within the next five to 10 years.
For established automakers, the potential challenge extends beyond pricing. Chinese manufacturers have invested heavily in electric vehicles, batteries, software and advanced driver-assistance technologies, areas that are becoming increasingly important to the global automotive industry.
Hyundai pushes back advanced driver-assistance launch
Munoz also addressed delays to Hyundai's plans for its proprietary advanced driver-assistance technology.
Hyundai Motor Group has postponed the planned launch of vehicles equipped with its in-house Level 2++ driver-assistance system, moving the target to late 2029 from the previously planned late 2027 rollout.
The technology is designed to provide a more advanced level of driving assistance and is comparable in some respects with Tesla's Full Self-Driving system, although the systems and their capabilities are not identical.
Munoz said Hyundai needs additional time to collect data and validate the safety performance of its technology before bringing it to customers.
“I don't like delaying anything,” Munoz said. “If you're humble, you realize your technology is not good, maybe you need to try a partnership,” he added, referring to Hyundai's partnership with Nvidia.
While Hyundai develops its own technology, the company is also working with Nvidia to introduce vehicles equipped with Level 2+ and Level 2++ systems in 2028.
The partnership will give Hyundai access to Nvidia's computing and artificial-intelligence technology while the automaker continues developing its own systems.
Hyundai maintains push for in-house technology
Despite the delay and its partnership with Nvidia, Munoz said Hyundai remains committed to developing key technologies internally.
He pointed to vertical integration as an important element of Hyundai Motor Group's long-term strategy, particularly in areas such as batteries and autonomous driving.
“We want to internalize,” he said. “We may buy things here or there, or have partnerships temporarily, but for relevant technologies like batteries, we want to have our own technology.”
Hyundai's broader autonomous-driving ambitions are also supported by its ownership of U.S.-based autonomous-vehicle company Motional.
The comments highlight the balancing act facing Hyundai and other global automakers: companies must invest heavily in emerging technologies while simultaneously managing competition from Chinese manufacturers that have moved quickly into electric vehicles, software and advanced automotive systems.
For Munoz, the experience in Europe illustrates the potential consequences of allowing Chinese brands unrestricted access to major automotive markets. The debate over tariffs, local manufacturing and technology partnerships is therefore likely to remain central to the industry's global strategy as automakers prepare for an increasingly competitive market.