**Nidec Develops Nearly All-Chinese Electric Car Motor for Toyota**
**Meta Description:** Nidec Corp. creates a predominantly Chinese electric motor for Toyota, enhancing competitiveness in the auto market amid rising challenges.
**URL Slug:** nidec-electric-motor-toyota-china
**Nidec Develops Nearly All-Chinese Electric Car Motor for Toyota**
Japan’s Nidec Corporation is producing an electric car motor that is almost entirely sourced from China, aimed at bolstering Toyota Motor Corporation’s position in the world’s largest automotive market. According to Nidec’s CEO, Mitsuya Kishida, approximately 99% of the materials and components used in the E-axle motor are sourced from China. Kishida described the process of developing this integrated motor as “incredibly tough” during a recent interview.
Nidec has commenced supplying this motor for Toyota’s electric bZ3X sport utility vehicle, which launched in March with a starting price of around 110,000 yuan. So far, approximately 20,000 units have been sold, marking it as the first Toyota vehicle to utilize this motor. This initiative is part of Toyota’s strategy to regain market share in China, where local manufacturers are increasingly capturing business from global competitors.
Utilizing predominantly Chinese components allows Nidec to reduce production costs, which is essential for pricing competitively in China’s highly saturated automotive market. The introduction of this new motor also aims to improve the financial performance of Nidec, which has faced challenges with profitability and a declining stock price, leading to dissatisfaction among investors.
Over the past fifty years, Nidec has pursued growth through acquisitions, having acquired 75 companies and operating around 250 factories. Kishida, who is set to take on the CEO role in 2024, announced a restructuring plan earlier this year, emphasizing the need to stabilize current operations and enhance efficiency before pursuing significant revenue growth.
At the inauguration of a new factory in Qingdao, northern China, Kishida highlighted the facility’s role in manufacturing motors, compressors, and electronics for home appliances. This new $100 million manufacturing hub consolidates two older facilities from different business units, reflecting Nidec’s commitment to operational efficiency. Kishida indicated that the restructuring might involve divesting certain business segments to improve the company’s image and potentially boost its stock price.
The investment in Qingdao is notable, as it represents a rare instance of a Japanese company expanding its footprint in China during a period when many others are scaling back due to slowing economic growth and rising global trade tensions. According to Japan’s Ministry of Finance, net new Japanese investment in China increased by about 3% in the first five months of this year, following a 6% rise the previous year. Toyota is also defying this trend, having announced a new factory for its Lexus brand in Shanghai in April, with an investment estimated at around $2 billion. Kishida expressed optimism about potential collaboration with Toyota on this project, noting that Nidec already supplies various components to the automaker.
**FAQ**
**What is the significance of Nidec’s electric motor for Toyota?**
Nidec’s electric motor, primarily sourced from China, is crucial for Toyota as it helps the company remain competitive in the Chinese automotive market, where local manufacturers are gaining ground. This collaboration aims to reduce costs and enhance the affordability of Toyota’s electric vehicles.
