POSCO Invests 1 Trillion Won in Eco-Friendly Electric Steel Plant for Electric Vehicles

Considering Factory Establishment in Gwangyang
Annual Production Capacity to Quadruple... Securing Global Demand
Establishing a Production System Capable of Meeting Diverse Needs

[Asia Economy Reporter Hwang Yoon-joo] POSCO is investing 1 trillion KRW to establish an annual production system of 400,000 tons for non-oriented electrical steel sheets used in drive motors for eco-friendly vehicles. This investment aims to respond to the rapidly increasing demand for eco-friendly vehicles such as electric cars and to secure market leadership.

At the regular board meeting held on the 5th at the POSCO Center in Seoul, POSCO approved a plan to sequentially invest about 1 trillion KRW starting next year to build a new factory with an annual capacity of 300,000 tons. The factory is expected to be built in Gwangyang. Currently, POSCO's production capacity for non-oriented electrical steel sheets for drive motors is about 100,000 tons per year. Through this facility investment, the capacity will be expanded to 400,000 tons by 2025.

Electrical steel sheets are broadly classified into grain-oriented electrical steel sheets used in transformers and non-oriented electrical steel sheets used in motors and generators. Non-oriented electrical steel sheets for drive motors are a type of non-oriented electrical steel that significantly improves power loss to enhance the efficiency of drive motors, thereby increasing driving range. These are used in automobiles, home appliances, and more. The new non-oriented electrical steel sheet factory that POSCO is establishing will primarily produce electrical steel sheets for drive motors used in eco-friendly vehicles.

With the new factory, POSCO will be able to produce not only wider products compared to existing ones but also high-efficiency products with thicknesses below 0.3 mm and products with various coating characteristics, enabling it to meet diverse demands from the industry. This is expected to reduce social greenhouse gas emissions by approximately 840,000 tons annually.

The establishment of this non-oriented electrical steel sheet factory for drive motors is a response to the growing importance of high-efficiency electrical steel sheets that directly affect the efficiency of electric vehicle drive components amid the rapid growth of the electric vehicle market. Recently, the automotive industry is accelerating its industrial restructuring from internal combustion engines to eco-friendly vehicles to respond to strengthening environmental regulations, with the market share of eco-friendly vehicles expected to increase from 12% this year to 43% by 2030.

Accordingly, demand for electric vehicle-related parts such as drive motors is also significantly increasing. The drive motor is the second most expensive component in electric vehicles after the battery. POSCO Group company POSCO SPS produces drive motors for eco-friendly vehicles. The sales forecast for drive motors is expected to increase about 3.5 times from approximately 200 billion KRW this year to 750 billion KRW in 2025. Some of the non-oriented electrical steel sheets for drive motors produced by POSCO are also supplied to POSCO SPS.

A POSCO official stated, "Through this facility investment, we plan to actively respond to the mega-trend changes in the automotive industry, such as the greatly expanding demand for electrical steel sheets in the eco-friendly vehicle era and the demand for improved driving range, and strengthen our global competitiveness."

This content was produced with the assistance of AI translation services.