South Korea’s POSCO Holdings is planning a battery electric vehicle (BEV) components factory in Poland to meet growing demand for zero emission vehicles in the region, according to local reports citing unnamed industry sources.

Through its components manufacturing unit Posco Mobility Solution, the group is expected to start construction of a traction motor core plant in Poland in the second half of 2023 once all formalities have been completed, including a local environmental impact study.

The company reportedly was still finalising its investment plans, including potential customers and investment levels, but reports suggested an initial investment of KRW100bn (US$75m) would be made with the first construction phase to be completed in 2025. South Korean vehicle manufacturers, including Hyundai Motor and Kia Corporation, are among Posco’s main customers for its traction motor cores.

Posco was reported to have allocated all of its available and planned global production capacity for traction motor cores to 2030, including factories in Mexico and China, and needed to sign off on additional capacity to take on any new orders.

It was also considering expanding capacity at plants in South Korea.

Rising sales of four wheel drive and high performance BEVs would create additional demand for traction motor cores, with overall industry sales set to triple to around 90m units from 34m in 2023, according to the company’s projections.

Posco Mobility Solution CEO Noh Min-Yong was quoted as saying: “We will become a global top tier parts maker for eco friendly vehicles through sustained R&D and quality improvement.”

The company wants to increase annual production capacity from 2.3m traction motor cores this year to 4.3m by 2025 and to 7m by 2030, according to the reports.