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Nidec aims to disrupt global EV supply chain with cheaper motors

Japanese supplier to spend $1.8bn on plants in China, Poland and Mexico

A Nidec display highlighting the array of motors used in a car. (Photo from company Facebook account)

OSAKA -- Japanese motor maker Nidec will invest around 200 billion yen ($1.8 billion) in overseas production of drive units for electric vehicles, aiming to raise output capacity to as much as 10 million units, Nikkei has learned.

The production plans mark an increase in investment in a new plant in the northern Chinese city of Dalian, along with new factories in Poland and Mexico.

Known for keeping a tight lid on costs, the manufacturer seeks to break into a segment of the electric-vehicle supply chain made up mostly of automaker affiliates, using low prices to gain market share.

The global electric-vehicle market is forecast to grow to about 14 million autos by 2030, up from around 2 million in 2019, according to IHS Markit. Nidec will contend against other independent motor suppliers including Germany's Bosch, the world's biggest auto parts maker.

As part of its production buildup, the Japanese company now plans to invest 100 billion yen in the new motor factory in Dalian, up from an initial budget of about 55 billion yen.

The factory will have a maximum capacity of about 3.6 million units a year. Nidec aims to begin production there around 2021.

China's electric-vehicle market -- the world's largest  -- faces uncertainties including a reliance on government subsidies. Yet Nidec believes it can sell motors at prices around 30% to 50% lower than what its competitors offer, so it is moving to increase its ability to supply electric-vehicle makers in China.

The Poland and Mexico factories will each represent about 50 billion yen in investment.  Each is to have a maximum capacity of about 2.4 million units a year and be ready to fill orders from European and U.S. automakers. Production will begin around fiscal 2021 in Poland and around fiscal 2023 in Mexico.

Automotive motors represent a new priority for Nidec, which grew from a small owner-operated workshop into the world's leading supplier of motors for hard-disk drives and other precision uses. It recently hired Jun Seki, formerly Nissan Motor's vice chief operating officer, to head its automotive segment.

The company predicts the global market for drive motors for electric vehicles and other uses will grow to 30 million units a year by 2030. Large electric vehicles sometimes require two motors.

Nidec aims to raise its global market share to 35%, up from just 4% now. Meanwhile, Japanese automakers are forming alliances in order to become competitive in this field. Toyota Motor parts suppliers Aisin Seiki and Denso created a joint venture last year, while Honda Motor tied up with Hitachi Automotive Systems.

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