POSCO International wins green car parts orders from US, Europe

POSCO International Corp., the general trading and energy exploration unit of South Korea’s steel giant POSCO Holdings Inc., is accelerating its push to nurture the green car component business as a new growth driver after winning a series of eco-friendly car parts and components orders from abroad.

The company announced on Wednesday that it has bagged an order, estimated at about 300 billion won ($229 million), from an unnamed major US finished carmaker to deliver reducers from 2024 to 2032 in phases.

It is also in talks with the US carmaker for additional orders, it added.

A reducer slows an electric vehicle’s RPM to generate the appropriate level of force, or speed. It is a core part of an EV motor system along with the drive motor, which acts like a powertrain in a combustion engine car and converts electric energy into kinetic energy for motion.

The latest EV component order comes about a month after POSCO International won a 1 trillion won deal to supply EV traction gears to another unidentified US carmaker, speculated to be General Motors Co., from 2024 to 2032.

POSCO International has also signed numerous contracts to supply other core EV parts such as permanent magnets and shafts, suggesting it is on course to reinforce its EV parts value chain, one of its new growth drives under its goal to transform into an eco-friendly business-focused company by 2030.

“We are rapidly shifting our focus toward eco-friendly car parts from the combustion engine-powered car parts business,” POSCO International said in a statement, adding that it will seek to build manufacturing facilities in North America in partnerships with Korean parts-making small and medium-sized companies if needed as part of efforts to become a global top-tier green car parts maker.

The company projects that its green car parts business will outgrow the combustion engine car parts business by the end of 2027.

FIRST HYDROGEN COMPONENT ORDER

POSCO International also announced that it last month signed a 100 billion won deal to supply power conversion devices for Hyvia’s hydrogen fuel-cell cars, marking its first-ever hydrogen car parts order from a global finished carmaker.

Hyvia is a hydrogen car-manufacturing joint venture set up by France’s Renault Group and the US-based Plug Power.

POSCO International will join hands with a Korean automotive parts maker to deliver the parts for Hyvia’s new fuel-cell cars in 2025.

As part of its green car parts business, the general trading company has been actively venturing into the EV car parts-making sector, too.

It has built manufacturing facilities at home and abroad to produce EV motor cores, another key EV part.

It completed the construction of the first motor core factory in Mexico in October and plans to break ground on the second factory in the South American country in the first half of next year.

The company aims to beef up its share in the global drive motor core market to 10% in 2030 with multiple production sites an annual combined capacity of more than 7 million units – more than 2 million from Korea and 5 million from abroad.

It is also seeking to build a factory to produce permanent magnets, an essential part of an EV drive motor core, in the US with Korean SME Start Group Industrial Co.

POSCO International shares rose 4.1% to close at 55,600 won on Wednesday.

Write to Mi-Sun Kang at misunny@hankyung.com

Sookyung Seo edited this article.