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Quick Highlights:
- Hyundai’s chairman warns 2026 could be one of the hardest years the auto industry has faced.
- EV momentum is slowing, while AI and self-driving tech are becoming the new obsession.
- Xiaomi is rapidly scaling, targeting over 550,000 cars in 2026.
- Autonomy may be less about consumers and more about pleasing investors.
Hyundai Predicts Things Are About to Get Rough
If you thought 2026 would finally bring some stability after the tariff chaos and geopolitical headaches of the last few years, Hyundai has some bad news. According to Euisun Chung, Executive Chairman of Hyundai Motor Group, the industry may be walking straight into one of its most difficult periods in decades.
And this isn’t just cautious corporate pessimism. Coming off a volatile 2025, Chung believes the warning signs the industry has been quietly stressing over are about to become very real.
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Why Hyundai Is Bracing for a Tough 2026
At the heart of Hyundai’s concern is global trade instability. Free trade is no longer free in practice; it’s increasingly about who can negotiate the least painful tariff structure. Even manufacturers that invested heavily in local production are feeling the squeeze.
Some key pressure points:
- A 15% U.S. tariff on Korean-made vehicles, which alone cost Hyundai about 1.8 trillion won ($1.2 billion) in Q3
- Reciprocal tariffs from Canada on U.S.-built Hyundai vehicles
- Operational delays caused by a U.S. immigration raid at a Hyundai–LG Energy Solution battery plant, expected to push construction back by two to three months
As Chung put it, “This will be the year when the crisis factors we have long worried about become reality.” That’s a strong statement from one of the world’s most diversified automakers.
From EVs to Robots: Hyundai’s Big Bet on “Physical AI”
While cars remain Hyundai’s core business, the company clearly sees the future extending well beyond traditional vehicles. EVs, once the industry’s golden child, are no longer the sole focus. Instead, Hyundai is leaning hard into AI, robotics, and autonomous systems.
This is where Hyundai believes it has a real edge. With Boston Dynamics in its portfolio, the company plans to deploy around 30,000 robots across manufacturing, logistics, and delivery operations. These aren’t just factory arms; Hyundai sees them as part of a broader “physical AI” ecosystem.
Chung argues that Hyundai’s advantage lies in something Big Tech struggles to replicate: real-world movement data. Cars, robots, and factories generate massive amounts of physical data, and Hyundai intends to turn that into a competitive weapon.
CES 2026: EVs Take a Backseat to AI and Autonomy
Remember when CES felt like an unofficial EV auto show? That era appears to be over. CES 2026 is shaping up to be far more about autonomous driving, AI, and software than shiny new electric cars.
Several factors are driving this shift:
- Reduced EV incentives and policy support in the U.S.
- Slower-than-expected EV adoption
- Massive EV-related write-downs still haunting balance sheets
Most major automakers aren’t launching new EVs at CES this year, which would have been unthinkable just a couple of years ago. Instead, the spotlight is on self-driving systems, hands-free driving, and “eyes-off” autonomy.
Why Self-Driving Is Back in Fashion
Autonomous driving has had a rough road. High costs, regulatory scrutiny, and high-profile failures from companies like Cruise and Argo left the sector looking shaky. But recent progress has changed the mood.
Momentum is coming from:
- Tesla’s limited robotaxi rollout in Austin
- Waymo’s expanding commercial operations
- Rapid improvements in advanced driver-assistance systems
Automakers now see autonomy as a place where capital can actually flow again. As one industry leader put it, this is where companies are choosing to place their bets, even if profitability remains uncertain.
Xiaomi’s Shockwave Through the EV Market
While Western automakers are retrenching, Xiaomi is doing the opposite. After selling 410,000 vehicles in 2025, the company is targeting over 550,000 units in 2026, a 34% year-over-year increase.
The SU7 sedan and YU7 crossover have already drawn praise from industry heavyweights, and Xiaomi isn’t slowing down. Plans reportedly include:
- Four new or refreshed models in 2026
- Five- and seven-seat SUVs
- Extended-range EVs that combine electric drive with a small gasoline generator
Perhaps most impressive is Xiaomi’s financial performance. The company reached profitability in just 18 months, roughly half the time it took Tesla, and did so in a brutally competitive Chinese market.
Autonomy: Real Consumer Demand or Wall Street Narrative?
This brings us to the big question automakers may not want to answer out loud. Do people actually want fully self-driving cars, or is autonomy primarily a story for investors?
The industry loves terms like “personal autonomy,” but not every buyer is looking for a robotic chauffeur. For many drivers, reliability, price, and usability still matter more than hands-off driving on city streets.
Autonomy may eventually become transformative, but right now it also feels like a strategic pivot to justify massive R&D budgets and reassure markets that automakers have a next act beyond EVs.
Final Thoughts
Hyundai’s warning shouldn’t be ignored. Between tariffs, political uncertainty, slowing EV demand, and rising competition from China, 2026 is shaping up to be less about growth and more about survival. The companies that adapt fastest, whether through AI, robotics, or smarter market strategies, are the ones most likely to come out intact.
