Posco International logo (Posco International)
In a bid to penetrate the US electric vehicle market, Posco International said Tuesday it is opening a Mexico office to oversee the production plant of a core component.
The component, the rotor motor core, is used to generate electricity in electric motors.
The decision has been approved by the board, the trading arm of Korea’s leading steelmaker said.
Some 52 billion won ($43.6 million) will be invested in building the facility, of which 80 percent will be funded by Posco International and the rest from its subsidiary Posco SPS.
Aiming to develop its Mexican production facility into an outpost for US operations, investments from the two are expected to grow to reach some 162 billion won by 2030.
The trading company said it chose Mexico to avoid uncertainties from Washington’s steel import restrictions.
Construction of the production facility will break ground in June and is to start operations in 2023. The factory will begin producing parts for 300,000 vehicles per year and gradually expand capacity to 1.5 million vehicles annually, the company explained.
The market for eco-friendly cars is expected to grow in the US, following President Joe Biden’s push to have electric vehicles half of US auto sales by 2030.
Demand for electric vehicle parts is also expected to grow, as the big three US carmakers -- General Motors, Ford and Stellantis -- increasingly go electric in the coming years.
By Kang Jae-eun (email@example.com