Hyundai is spending nearly $500 million to build the next Tucson in Alabama

Hyundai Motor Manufacturing Alabama will receive nearly $500 million to expand its Montgomery plant for the next Tucson, engine production and next-generation propulsion. The all-new Tucson is due to start production there before the end of 2026. The money brings Hyundai’s Alabama investment to $2.2 billion since operations began in 2005. The announcement was reported by Autoblog on November 1 and traces to a Hyundai newsroom release.

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The plant’s capacity is 400,000 cars and 700,000 engines a year, across a footprint of 2 million square feet. Hyundai has not disclosed a job count for this round, or how the money divides among the Tucson, the Santa Fe, engines and powertrain work.

The Tucson is Hyundai’s best-selling model in America, and Autoblog describes the Santa Fe as close behind it in sales. Putting both on the Montgomery floor, along with the new extended-range technology, tilts the plant toward the two vehicles that matter most to Hyundai’s American volume.

Mark Rader and the Montgomery commitment

Mark Rader, president and chief executive of the Alabama plant, said in Hyundai’s announcement that the investment would keep the site a cornerstone of Hyundai’s North American manufacturing operations for years to come. The release says the spending will expand engine manufacturing capabilities and advance next-generation propulsion technologies. Autoblog’s Pablo Salapantan ties it to a wider plan by Hyundai Motor Company chief executive Jose Munoz to bring Hyundai’s U.S. investment to $2.6 billion between 2025 and 2028.

Retooling will cover the all-new Tucson, a refreshed Santa Fe, and extended-range electric vehicle technology that Hyundai says will be more compact, lighter and more energy efficient than current range-extending powertrains. Hyundai’s U.S. group says the all-new Tucson will begin production before the end of 2026, with the refreshed Santa Fe following it, and describes the extended-range technology as a next-generation propulsion step rather than a single model.

Tucson hybrid imports and the September announcement

Munoz first gave the figure on stage. At the Automotive News Congress in Detroit, as reported by the Alabama Political Reporter on September 30, he said Hyundai will invest about a half-billion dollars, bringing Tucson hybrids to Alabama and later the Santa Fe. The plant currently builds only combustion-engine Tucson models, and the hybrids sold in America are imported from South Korea. Genesis production has been moved back to South Korea to free capacity in Montgomery.

Just Auto’s coverage describes the Tucson Hybrid as a 1.6-liter turbocharged powertrain rated at 42 mpg with a combined 233 hp. It also notes that the Tucson is Hyundai’s best-selling American SUV, at about 182,000 units in the first nine months of 2026, and that total Hyundai U.S. sales were up 3% to 697,464 over the same period. Just Auto also reports that a plug-in hybrid version will be sold in other global markets but not in the U.S.

Hybrid sales explain the urgency. The Alabama Political Reporter notes that hybrids have driven much of Hyundai’s recent sales growth and that the company outsold Ford in the most recent quarter on hybrid sales. Just Auto frames the Montgomery spending as a way to strengthen the U.S. manufacturing base and reduce exposure to import tariffs, since every Tucson Hybrid sold in America today crosses the Pacific from South Korea. Imports also expose the Tucson Hybrid to shipping and currency swings that a Montgomery-built vehicle would avoid.

An August announcement had already outlined up to five new models in 2027 for the plant, including the all-new Tucson, the Tucson Hybrid and the Santa Fe extended-range electric vehicle. The nearly $500 million is the funding that makes that list physically possible, covering new engines and components as well as increased electric powertrain capacity.

Tariffs and the scale of earlier spending

Alabama’s earlier Hyundai money was smaller. The Alabama Political Reporter notes that a $410 million expansion in 2019 had been the largest at the facility until now. Tariffs are a recurring backdrop, and Autoblog separately covered how Audi plans its first U.S. factory after a $1.4 billion tariff hit. Autoblog’s page for the 2027 Tucson shows the model the new line will build.

Montgomery has been a major destination for capital. The Alabama Political Reporter says more than $1 billion was invested there in 2024, that Montgomery County ranked third in the state for capital investment and fourth for job creation in 2025, and that the Montgomery Chamber of Commerce counts more than $5 billion invested across 100 major projects and nearly 4,000 jobs over five years. The new money continues a pattern in which each round deepens Hyundai’s dependence on the site.

What remains open is timing for the Santa Fe and extended-range work. Hyundai has committed to the Tucson before the end of 2026, but the release and the September remarks give no dates for the later vehicles, and no figure for new jobs. A job figure for this round, absent from both the release and the September remarks, would show how much of the spending goes to automation and how much to hiring.

This article was produced with the assistance of AI and reviewed by Morning Overview editors prior to publication.

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