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2Q26 preview: Look beyond near-term concerns to robotics momentum

2Q26 results likely to be better than recent fears suggest

Hyundai Motor (HMC) is scheduled to release its 2Q26 results on Jul. 23 at 2:00 p.m. We estimate revenue at W48.3tr (+5.2% YoY; 1% below the consensus of W48.7tr) and operating profit at W2.86tr (-20.6% YoY; 5% below the consensus of W3.02tr). While weak wholesale volume has already signaled a soft quarter, we still expect the results to prove better than recent market fears would imply. Wholesale volume declined 7% YoY (-6% excluding China; -16% in Korea and -5% overseas), affected by a fire at a parts supplier in Daejeon. (Unlike Kia Corp., HMC lacks a lineup of entry-level EVs that could have cushioned the decline.) Overseas, sales were hurt by weakness in the Middle East and Europe; in Europe, the absence of an entry-level EV lineup ahead of the Ioniq 3 launch in 2H26 weighed on demand. In June, a fire at a captive parts supplier’s plant in India exacerbated the weakness. Meanwhile, tariff-related headwinds are likely to have increased only modestly vs. 2Q25, but the magnitude of tariff contingency effects remains an important area to watch.

The FX environment likely remained supportive, with the average USD/KRW and EUR/KRW rates up 100 and 160 YoY, respectively. That said, the benefits were likely partially offset by a higher quarter-end rate (USD/KRW: +2% QoQ). Notably, in 2Q25, an 8% QoQ decline in the quarter-end rate resulted in unusually low warranty expenses, leading to a tough YoY comparison.

Focus likely to shift to robotics in 3Q26

Domestic production appears to have normalized in June, creating expectations for a recovery in July sales. That said, the outcome of the ongoing partial strike bears close watching. Following the 2Q26 earnings release, however, we expect attention to shift toward robotics momentum. According to recent media reports, SoftBank’s exercise of its put option will result in Hyundai Motor Group acquiring full ownership of Boston Dynamics (to be confirmed in Hyundai Glovis’s semiannual report in August). While no details have yet emerged regarding potential strategic investors, we continue to believe that investment in Boston Dynamics by big tech players is highly plausible.

Like other US robotics companies, Boston Dynamics should increasingly be evaluated through the lens of future funding rounds. We believe successive investments by strategic and financial investors could drive a gradual valuation increase. In the near term, we believe investors should focus on the August launch of the Robot Metaplant Application Center (RMAC) in the US and potential updates on the group’s robotics strategy at the CEO Investor Day scheduled for Aug. 26. While we trim our target price to W840,000 (from W950,000) to reflect the near-term impact of production disruptions, we continue to see substantial upside and believe investor attention should shift to robotics momentum, which is likely to build after the earnings release.