POSCO International to set up EV parts factory in Poland

POSCO International, the general trading and energy exploration unit of South Korea’s steel giant POSCO Holdings Inc., plans to build an electric vehicle parts plant in Poland to meet surging demand in line with rapid growth in the eco-friendly automobile sector.

POSCO International and its wholly owned material and parts maker POSCO Mobility Solution are scheduled to break ground on a traction motor core factory in Poland in the second half of this year with an aim to start operations in 2025, according to industry sources in Seoul on Sunday. Local authorities are poised to assess the environmental impact of the plant soon.

POSCO Mobility Solution was expected to initially invest up to 100 billion won ($74.7 million) in the facilities and double the spending later, the sources said. The company was reportedly considering customer orders and factory operation conditions to make the final decision on its investment value.

A traction motor core, called the second heart of an EV as it generates power for an electric motor, makes up about 40% the expense of producing a motor. The motor accounts for about 15% of EV manufacturing costs, the second-largest after batteries, which make up some 30%.

Most EVs manufactured by global makers such as Hyundai Motor Co. and Kia Corp. are equipped with POSCO Mobility Solution’s traction motor cores made of POSCO’s premium non-oriented electrical steel Hyper No, which increases the output of the motor with relatively little electricity and reduces noise.

SOLD OUT

POSCO Mobility Solution decided to build the new factory in Poland as EV part makers have already ordered all traction motor cores to be produced by 2030 at every plant, including those in Mexico and China. The new plant will be completed in September and October.

It is also considering expanding production capacities at South Korean plants on expectations of further growth in demand as four-wheel-drive or high-performance EVs need more than four electric motors. Global electric motor demand was forecast to more than double to 89.6 million units by 2030 from 33.9 million units this year.

POSCO Mobility Solution aims to increase its traction motor core output to 4.3 million units by 2025 and more than 7 million by 2030 from 2.3 million this year. Its manufacturing levels in Europe are set to rise to 260,000 units by 2025 and 1.2 million units by 2030.

“We will become a global top-tier part maker for eco-friendly vehicles through sustained research and development, as well as quality improvement,” said POSCO Mobility Solution President and CEO Noh Min-Yong.

Write to Hyung-Kyu Kim and Mi-Sun Kang at khk@hankyung.com
 
Jongwoo Cheon edited this article.