Japanese industrial manufacturer Nidec plans to withdraw from its e-axle joint ventures in China and Europe, marking a strategic shift away from a business segment the company now views as highly competitive.
Nidec President and Chief Executive Mitsuya Kishida said the company intends to exit its electric axle operations, describing the sector as a “red ocean,” according to an interview with Nikkei Asia.
“We want to withdraw from the e-axle business, which has become a red ocean,” Kishida told Nikkei Asia.
The Japanese company is currently negotiating with Chinese automaker GAC over its departure from Guangzhou Nidec Auto Drive System, a joint venture established in 2019.
“Although the specific approach has not been decided, we will dissolve both joint ventures,” Kishida said.
Nidec has not yet begun discussions with Stellantis regarding its European e-axle venture, though Nikkei Asia reported that such talks are expected.
The Chinese joint venture, Guangzhou Nidec Auto Drive System, is based in Guangzhou and is owned 51% by Nidec and 49% by GAC subsidiary GAC Components. At the time of its formation, the venture aimed to manufacture e-axles primarily for GAC vehicles while also targeting external customers.
The partnership combined Nidec’s electric drive expertise with GAC’s procurement and local manufacturing capabilities, while development work was largely handled by engineers in China.
In Europe, Nidec partnered with Stellantis through the Emotors joint venture, which began producing electric motors at Stellantis’ Trémery facility in France at the end of 2022.
The Trémery plant, previously one of the group’s largest diesel engine manufacturing sites, was converted to support electric motor production as automakers accelerated electrification plans. At the time, production capacity was projected to surpass 1 million units annually by 2024.
According to Nikkei Asia, the e-axle business had been a major initiative championed by Nidec founder Shigenobu Nagamori. The company expanded into automotive electronics through acquisitions including a Honda-affiliated electronic controls business in 2014 and Omron’s automotive electronics division in 2019.
Nidec’s planned withdrawal comes amid mounting financial pressure within the business. For the first half of its current fiscal year, which ended in September, the company reported losses of 87.7 billion yen ($560 million) in its e-axle division.
The losses included provisions for anticipated contract-related costs and impairments tied to production facilities, reflecting the challenges facing suppliers in the increasingly crowded electric vehicle drivetrain market.
