Hyundai Puts $450 Million Into Alabama and Will Build the New Tucson There Before 2027
The roughly $450 million package also adds hybrid and EREV engine variants and tooling for a refreshed Santa Fe. Pricing and an on-sale date for the 2027 Tucson are unannounced.
Hyundai will start building the all-new Tucson at its Montgomery, Alabama, plant before the end of 2026, the company confirmed on October 28 as it detailed roughly $450 million in fresh spending at the factory. The money also pays for additional engine variants for hybrid and extended-range electric (EREV) powertrains, plus tooling for a refreshed Santa Fe.
That answers one of the open questions in our 2027 Hyundai Tucson guide: where the U.S.-market SUV will come from, and roughly when. What Hyundai still hasn't said is when it reaches dealers or what it costs. A production start is not an on-sale date.
What the money buys
According to Hyundai Motor Manufacturing Alabama (HMMA), the package covers new equipment, tooling and plant infrastructure. The most significant change is in the powertrain shop, which will be able to build more engine variants, including ones designed for hybrid and EREV applications. Hyundai says that gives the line more flexibility to follow demand.
The automaker puts its total investment in HMMA at nearly $2.2 billion since production began in 2005. This round is part of Hyundai Motor Group's $26 billion U.S. spending commitment for 2025 through 2028. The plant currently builds the Santa Fe, Santa Fe Hybrid, Tucson and Santa Cruz and employs about 4,200 people.
Why the Tucson move matters
Hyundai Motor Company CEO José Muñoz previewed the plan at the Automotive News Congress in Detroit on September 29, saying Tucson hybrids would come to Alabama first and the Santa Fe would follow, the Alabama Political Reporter wrote, citing Automotive News. Montgomery has so far built only the gas Tucson; the current Tucson Hybrid is shipped from Ulsan, South Korea, according to a report by Korea's Asia Economy.
Moving hybrid production to Alabama would take the Tucson Hybrid out of the import stream and out of reach of U.S. tariffs on Korean-built cars. It also fits the plan Hyundai set out at its CEO Investor Day in August: more than 10 hybrid models in North America by 2030, built in Alabama and at the Metaplant in Georgia, with hybrids reaching half of sales. The Montgomery money adds to a wave of factory spending across the region, laid out in our map of the Southern auto belt.
The EREV hardware has a likely first user. At the same August event, Hyundai said its first extended-range EV would be a Santa Fe built at HMMA, due in the first half of 2027 with a targeted total range of more than 600 miles. The new Alabama release, however, doesn't name which models will use the EREV engines or link them to the refreshed Santa Fe it mentions.
What we still don't know
Hyundai hasn't disclosed which engines, displacements or outputs the upgraded Montgomery lines will produce, or whether the Alabama-built fifth-generation Tucson will include the hybrid from day one. There's no timing yet for the refreshed Santa Fe. U.S. pricing, EPA ratings and an on-sale date for the 2027 Tucson are also still to come. Until then, shoppers weighing the outgoing model can see how it stacks up in our Honda CR-V vs. Hyundai Tucson Hybrid comparison.
