POSCO Holdings announced it had started construction of an electric vehicle (EV) components manufacturing plant in Mexico, to increase its exposure to fast growing EV demand in North America.

Posco International, a subsidiary of the South Korean steel and chemicals group, planned to produce driving motor cores in Ramos Arizpe in Coahuila state from the end of 2023.

The plant would have capacity for 650,000 units a year by 2025, rising to 1.5 million by 2030 after the supplier completed its US$122m investment.

Driving motor cores are key components which generate electricity in EVs and are key to determining their performance, the company said, adding it had received orders worth US$460m for the components from global automakers.

Posco group had invested heavily in the global EV supply chain in the last few years, with a number of plants for EV battery components and materials currently under construction worldwide.

Posco International itself had been expanding in environment friendly business sectors, including electric and hydrogen vehicles and green energy. It completed construction of a motor core plant in Pohang, South Korea last December.

It aimed to have capacity of seven million motor cores by 2030, up from 1.2 million in 2021.