Japan’s Nidec focuses on EV motors as price battle heats up

TOKYO — Japanese motor maker Nidec will focus on sales of motors for smaller electric vehicles, as intensifying price competition forces more automakers to source the vital components from outside suppliers, Nidec founder and Chairman Shigenobu Nagamori said Tuesday. “Just as in home appliances, the price competition in EVs will […]

TOKYO — Japanese motor maker Nidec will focus on sales of motors for smaller electric vehicles, as intensifying price competition forces more automakers to source the vital components from outside suppliers, Nidec founder and Chairman Shigenobu Nagamori said Tuesday.

“Just as in home appliances, the price competition in EVs will be more severe, with new entrants from outside the car industry coming into the market,” Nagamori said.

The year 2025 will be a “turning point” in which demand for electric car motors starts to rise, he added, with some automakers expected start procuring motors from other companies instead of building their own due to pressure to cut costs.

Nidec has been turning out electric car motors since 2018. It aims to grab 40{92b8314a80b58944ba0df9bff999fd6692ae6ba618bc5950ca8fb5ab90484bed} to 45{92b8314a80b58944ba0df9bff999fd6692ae6ba618bc5950ca8fb5ab90484bed} of the global market for such motors by 2030 by investing heavily in China, a large and rapidly growing market for electric vehicles.

Nagamori cited the example of a $5,000 mini EV made by a Chinese electric car company for the domestic market, saying this is the direction the car industry is heading. Nidec aims to produce motors for 3.5 million electric vehicles by fiscal 2025 and is looking to raise that to 10 million units by fiscal 2030, he said.

“We will invest in equipment and grow human resources, and acquire companies if necessary,” Nagamori said. “We are confident that we are the only company in the world that is currently preparing for the upcoming competition with such investment,” he added.

Nagamori spoke to the media after the Japanese motor maker on Tuesday reported a 30{92b8314a80b58944ba0df9bff999fd6692ae6ba618bc5950ca8fb5ab90484bed} increase in operating profit on the year for the six months through September despite headwinds from global supply chain disruptions.

The Kyoto-based company reported an operating profit of 90 billion yen ($704 million), compared with a consensus forecast for 80 billion yen. Its six-month sales came to 910 billion yen, up 21{92b8314a80b58944ba0df9bff999fd6692ae6ba618bc5950ca8fb5ab90484bed}, versus market expectations for 800 billion yen.

Nidec is the world’s largest supplier of motors used in home appliances, computer hard disk drives, robots and automotive parts such as seats and power steering.

However, the company has been hit by supply chain disruptions this year, as automakers have cut production due to semiconductor shortages exacerbated by recent COVID-19 outbreaks in Southeast Asia.

In Vietnam, where the company has factories that make small size and precision motors, restrictions and lockdowns at its plants have disrupted production, said Nagamori. He added that the company hopes to catch up in the third and fourth quarters.

Power supply restrictions in China have also disrupted various industries.

In Japan, new car sales fell for three straight months through September, year on year, while sales of home appliances dropped for the fourth straight month. In China, new car sales fell for the fifth straight month.

Nidec expects its revenue to rise 11{92b8314a80b58944ba0df9bff999fd6692ae6ba618bc5950ca8fb5ab90484bed} to 1.8 trillion yen, with its net profit rising 21{92b8314a80b58944ba0df9bff999fd6692ae6ba618bc5950ca8fb5ab90484bed} to 148 billion yen in the year ending next March.


https://asia.nikkei.com/Business/Electronics/Japan-s-Nidec-focuses-on-EV-motors-as-price-battle-heats-up

Shaqil Heaton

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