POSCO International, a significant player in the global trading and energy exploration market, part of South Korea's leading conglomerate POSCO Holdings Inc., has announced its strategic move to establish a manufacturing facility dedicated to electric vehicle (EV) components in Poland. This initiative is part of a broader investment strategy by South Korea in the Central and Eastern Europe (CEE) region, highlighting the growing business partnerships and the search for new business opportunities in this area. The investment underscores the commitment to meet the increasing demand for eco-friendly automotive parts, in tandem with the booming eco-friendly vehicle industry.
Scheduled to commence construction in the latter half of this year, POSCO International, alongside its fully owned subsidiary POSCO Mobility Solution, aims to inaugurate the traction motor core factory by 2025. This plant, situated in Poland, is poised to significantly contribute to the green mobility sector, with an initial investment pegged at up to 100 billion won ($74.7 million), which is expected to increase as the project advances. Local Polish authorities are on track to conduct an environmental impact assessment shortly, ensuring that the development aligns with sustainable practices.
The factory will focus on manufacturing traction motor cores, a crucial component of electric vehicles, often referred to as the EV's "second heart." These cores are instrumental in powering the electric motors, constituting approximately 40% of the motor's production cost, which in turn represents about 15% of the total manufacturing cost of an EV. The decision to build in Poland comes in the wake of POSCO Mobility Solution's traction motor cores, crafted from POSCO’s high-quality non-oriented electrical steel, being fully pre-ordered up to the year 2030. This steel is renowned for enhancing motor output efficiently while minimizing electricity consumption and noise levels.
With an eye on the future, POSCO Mobility Solution is contemplating an expansion of production capabilities in South Korea, anticipating a surge in demand as the industry shifts towards four-wheel-drive and high-performance EVs, which require multiple electric motors. The global demand for electric motors is expected to soar, with projections indicating a jump to 89.6 million units by 2030 from the current 33.9 million units.
By ramping up its production of traction motor cores to 4.3 million units by 2025, and further to over 7 million units by 2030, from the current 2.3 million units, POSCO Mobility Solution is setting its sights on becoming a leading global supplier of parts for eco-friendly vehicles. This ambitious growth plan includes enhancing its European manufacturing output to 260,000 units by 2025 and 1.2 million units by 2030. Through continuous research and development, coupled with an unwavering commitment to quality improvement, POSCO Mobility Solution’s President and CEO Noh Min-Yong envisions the company ascending to the top tier of global eco-friendly vehicle part manufacturers.
