POSCO International secured a 600 billion won ($431 million) contract to supply Tesla with drive motor cores, marking a strategic shift for the electric vehicle maker toward supply chains independent of China.
The Korean company’s subsidiary, POSCO Mobility Solution, signed the long-term agreement to provide components for 3 million vehicles, according to industry sources. Each unit costs approximately 200,000 won ($144), with the total deal valued at least 600 billion won.
Tesla’s selection of POSCO International reflects growing concern over rare earth element dependencies. Drive motor cores require neodymium and praseodymium, materials where China controls over 90% of global processing capacity. The deal comes as Washington and Beijing engage in escalating trade tensions over critical minerals access.
POSCO International has established partnerships across North America, Australia and Asia to secure 8,500 tons of permanent magnets without Chinese raw materials. The company expects its China-independent rare earth supply system to reach full operation next year.
The move positions Tesla ahead of potential supply disruptions. Chinese authorities have recently imposed export restrictions on seven rare earth elements, creating headaches for global automakers dependent on these materials for motors, batteries and other components.
POSCO International has previously secured contracts supplying 4.4 million motor cores to Hyundai Motor Group, demonstrating the Korean company’s expanding footprint in the global EV supply chain.
