POSCO International hits $760 mn in global orders for green auto parts

Eco-friendly vehicle component [Courtesy of POSCO International]

POSCO International, the trading arm of South Korea’s leading steelmaker, saw its annual orders hit the 1 trillion won ($760 million) mark for a second consecutive year, thanks to global contracts for electric and hydrogen vehicle components worldwide including its latest 300 billion won deal with a major U.S. automaker.

According to the company on Wednesday, POSCO International announced the signing of a 300 billion won contract for the supply of electric vehicle (EV) reducers with a major U.S. automaker. Reducers play a crucial role in reducing the rotation speed of electric vehicle motor drive systems. Sourced from domestic small- and medium-sized enterprises, the deliveries are scheduled sequentially from 2024 to 2032 and the company is also in ongoing negotiations for additional orders, estimated to be worth billions of won.

POSCO International previously secured contracts for other essential EV components, including permanent magnets and shafts, thus successfully expanding its business in the EV sector. These components will be supplied from domestic small- and mid-tier manufacturers, including Stargroup Ind. Co.

POSCO International is also broadening its business scope to include the hydrogen vehicle component market, and the company finalized a contract worth a total of 100 billion won to supply hydrogen vehicle power conversion devices to Renault Group’s Hyvia in November. This marks POSCO International‘s entry into the hydrogen vehicle component market, with domestic small- and medium-sized enterprise Younghwa Tech Co. handling the manufacturing.

Hyvia is a company formed via a collaboration between the French automaker Renault Group and U.S. hydrogen fuel cell company Plug Power Inc. Anticipating the launch of commercial hydrogen fuel cell vehicles, Hyvia will have its components supplied from domestic manufacturers through POSCO International starting in 2025.

The Hyvia deal has also contributed to POSCO International’s 1 trillion-won annual order intake for environmentally friendly vehicles, along with the recent deal with a major U.S. automaker and in June 2023, the company signed an estimated 625 billion won contract with Hyundai Motor Co. for the supply of propulsion motor cores.

POSCO International anticipates that the proportion of its business related to green vehicle components will surpass that of internal combustion engine parts by 2027. Alongside its collaboration with domestic small- and medium-sized manufacturers, the company is expanding production capabilities at its subsidiary, POSCO Mobility Solution.

The subsidiary is building production facilities for electric vehicle propulsion motor cores globally, with the construction of a production facility completed in Mexico in October 2023 and plans to commence construction of a second plant in the first half of 2024 targeting North American markets.

Simultaneously, the company is seeking to establish a production facility in Poland for the European market. With a commitment to develop a production system for over 7 million propulsion motor cores annually, with over 2 million domestically and over 5 million overseas by 2030, POSCO International is aiming to nab 10 percent of the global market share.

“We are swiftly transitioning to the eco-friendly vehicle component business in preparation for the carbon-free era,” an official from POSCO International said, adding the company could build production facilities in North America if necessary.