POSCO International CEO Joo Si-bo, fifth from left, shakes hands with Coahuila Governor Miguel Riquelme, fourth from left, after a groundbreaking ceremony for an EV motor core plant in Coahuila, Mexico, Thursday. From left, Coahuila Economy Minister Claudio Bres Garza, Ramos Arizpe Mayor Jose Maria Morales, Korean Ambassador to Mexico Suh Jeong-in, Riquelme, Joo, POSCO Mobility Solutions CEO Kim Hak-yong and POSCO Holdings department head Oh Se-chul. / Courtesy of POSCO International

By Kim Hyun-bin

POSCO International held a groundbreaking ceremony, Thursday, for a new plant manufacturing automotive motor cores in Coahuila, Mexico, to meet growing demand for electric vehicle (EV) parts in the North American market.

Motor cores are a key component for generating electricity in EVs.

"With the Mexican plant as a bridge, we will strengthen our penetration into the North American EV parts market and establish ourselves as a key partner when it comes to motor cores in the global eco-friendly car industry," POSCO International CEO Joo Si-bo said.

The event was also attended by Coahuila Governor Miguel Riquelme, Korean Ambassador to Mexico Suh Jeong-in and POSCO Mobility Solutions CEO Kim Hak-yong.

Due to U.S. import restrictions on electric steel sheets, a key material for motor cores, and logistics competitiveness, POSCO International selected Mexico, which has a huge automotive industry, as its production base to target North America.

Ramos Arizpe the city in the Mexican state of Coahuila where the new plant will be built, is the center of the automotive industry in northeastern Mexico, where major carmakers and parts factories are concentrated.

The company plans to invest about 160 billion won ($123 million) into the Mexican plant by 2030, which will have an annual production capacity of 1.5 million parts.

POSCO International already secured a long-term contract worth $460 million with a major carmaker before the start of the plant's construction, and it will be in charge of producing the electrical steel sheets required for this project until 2030.

According to market researcher IHS Markit, the global EV motor core market is expected to grow from 6.25 million in 2020 to 30.5 million in 2025 and 54.2 million in 2030, increasing at a compound annual growth rate of 24 percent.

POSCO International has selected motor cores, a key part of eco-friendly vehicles, as a strategic business and has continued making active investments. The company has set a goal of becoming a global eco-friendly car parts company by establishing a production capability of 7 million parts per year both domestically and abroad by 2030.