South Korea’s Posco International said it had agreed to supply 3.5m traction motor cores to Hyundai Motor Group (HMG) for future EVs in a deal estimated to be worth around KRW900bn (US$678m).

The eight year contract starts in 2026 and involves the supply of over 1m front wheel drive and 1.6m rear wheel drive traction motor cores to Hyundai Motor Group Metaplant America in Georgia [home to the US Kia assembly plant] scheduled to be completed in 2025.

Another 810,000 rear wheel drive cores would be shipped to HMG plants in South Korea.

This new contract brings the number of cores HMG has ordered from Posco since last December to over 10m. The cores would be produced by Posco Mobility Solutions, a subsidiary of Posco International.

The company said its motor cores were produced using non oriented electrical steel sheet which its claimed waste significantly less energy than those produced with conventional steel sheets.

Posco International said in a statement “This order is significant in that we will directly supply traction motor cores, a key component of a traction motor, to HMG’s new overseas plant.”

Posco is currently establishing overseas factories to help meet the requirements of the US Inflation Reduction Act and the European equivalent.

Its first overseas motor core production facility was scheduled to be completed in the fourth quarter of 2023 with initial capacity of 1.5m units a year.

The company was also close to agreeing a factory site in Poland with completion scheduled for 2025.