From iPhones to e-axles: how one tech firm is pushing into electric vehicles

In this news, we discuss the From iPhones to e-axles: how one tech firm is pushing into electric vehicles.

(Reuters) – The miniature engines that make iPhones vibrate silently turned Japan’s Nidec 6594.T into a 1.5 trillion yen ($ 14 billion) company.

In recent years, Nidec founder Shigenobu Nagamori has turned to automobiles and a technology that turns electricity stored in the battery into propulsion energy.

This technology, called electric axle or electronic transmission, is emerging as a new competitive front as the auto industry shifts to electric vehicles. By 2030, Nagamori says he wants a 35% share of the global electric axle market which is expected to be worth between $ 20 billion and $ 30 billion a year by then, up from $ 2.8 billion to $ 3 billion today.

He is betting electric cars will follow the same path as air conditioners, washing machines, and computers, with key components, such as motor systems and central processing units, standardized and supplied by a few dominant tech companies.

“Laptops and aircons from different manufacturers may look different on the outside, but you look inside, the parts (keys) are all more or less the same. The gut technologies of electric vehicles are going to become as commoditized or standardized “as these elements, Nagamori said at a press conference on the results earlier this year. Electric axles and batteries will come from a few competitive suppliers, he predicted.

To get Nidec to become one of these suppliers, the 76-year-old Nagamori decided to acquire the gearmaker JATCO from Nissan Motor Co 7201.T and combine it with the motor and electronics. power control unit from Nidec. Company. Some details of this effort, which Nissan is resisting, are reported here for the first time. The buyout battle underscores how quickly electrification is redefining the auto industry.

“Nidec brings the tech industry approach to the automotive industry,” said Shiro Sakamaki, analyst at Daiwa Securities. “Like cellphones and laptops, car models are already being redesigned at an increasingly rapid rate, and Nagamori is betting that the trend will accelerate and automakers will leave the development and manufacture of technologies such as the electric axle to suppliers.

Nagamori declined to be interviewed for this article. Nidec declined to comment on his lawsuit against JATCO.

A BRIEF HISTORY OF THE E AXLE

The e-axle, or e-drive, combines the gears, motor and power control electronics of an electric vehicle. It is the “brain” that controls how a vehicle manages the energy stored in its battery and transforms it into energy. It also makes it possible to recover the energy lost during braking and returns it to the battery.

In other words, a well-designed electric axle maximizes a vehicle’s fuel efficiency and acceleration and helps extend its range and flexibility.

The technology has emerged as a competitive front in part because automakers are under pressure to cut manufacturing costs for electric vehicles to make them as affordable as traditional gasoline cars. Electric axle systems and batteries offer the industry the greatest margins for efficiency gains and cost savings.

Advances in new technologies are essential to global efforts to reduce CO2 emissions. CO2 emissions from vehicles account for about 17% of emissions from all sources, according to Zifei Yang, analyst at the International Council on Clean Transportation in Washington. Additionally, Yang says, the rate of reduction in vehicle emissions has slowed as more people drive larger, more polluting SUVs. Other analysts point to trends in emerging economies such as China and India, where large numbers of middle-class consumers are trading mopeds for cars.

Some automotive technology providers have joined forces to manufacture electric axle systems. Japan’s Denso and Aisin formed a joint venture called BluE Nexus in 2019 and Toyota earlier this year decided to invest in the company, taking a 10% stake. This year, the American parts supplier BorgeWarner agreed to acquire the British company Delphi, and the Japanese Hitachi Automotive merged with three suppliers from the Honda group. Automakers Volkswagen and Ford, Toyota and smaller Japanese brands are each forming a technology alliance for electric vehicles, in part to reduce manufacturing costs for electric axles.

Tesla initially developed its own electric axle technology. Reuters could not determine whether it continues to use it in newer models.

GM, Nissan and some other automakers believe that electric axles offer such a margin for profitability and product differentiation that they want to design and manufacture their own systems. GM believes it can better integrate the electric axle with the battery and the rest of the vehicle, resulting in a quieter, smoother and more economical ride, said Adam Kwiatkowski, GM’s chief executive engineer for systems. global electric propulsion.

“Technologies in a vehicle that are technically complicated, house a whole lot of intellectual property and are capital intensive, you are always better off designing and producing them yourself,” Kwiatkowski told Reuters in an interview.

If GM doesn’t design its own electric axles, Kwiatkowski added, it will have to buy them, it won’t be sure about their technical details or efficiency, and will be locked into drive unit designs that may not be optimal. .

A DIFFERENT APPROACH

Nagamori of Nidec said he believes the way to become a market leader in electric axles is to focus on reducing the cost of the technology. The way to do it, he says, is to be able to produce all of the components and sub-technologies that go into an e-drive system, and by scaling up to produce more.

This is partly why Nidec, engine specialist, is looking for companies with expertise in power electronics. It acquired automotive electronic control systems producer Honda Elesys Co from Honda in 2014 and the automotive electronics division of Omron Corp in Japan in 2019.

To complete the technical loop of the electric axle, Nidec has set its sights on JATCO, an automotive transmission producer in the city of Fuji at the foot of Mt. Fuji, 75% owned by Nissan.

According to two sources close to Nagamori’s thought, the founder of Nidec believes JATCO is at stake due to financial problems at Nissan that have already forced the automaker to sell non-core assets, including its fleet of aircraft from business.

Over the past year, Nidec has hired several Nissan executives, including its former vice director of operations Jun Seki.

Nagamori managed to hire Seki shortly after being sidelined from Nissan’s top job last year. News emerged late on October 8, 2019 that Makoto Uchida had been chosen as Nissan’s new world chief. The next morning, Seki received a call from a headhunter, one of the sources said. Nagamori wanted to sit with him.

Soon after, Seki traveled to Kyoto to meet with Nagamori, intending to push back the approach, the source said. Instead, Nagamori convinced Seki to consider helping Nidec ride the wave of electrification sweeping the auto industry and turn Nidec into a 10 trillion yen company by 2035.

In November, as negotiations between the two men progressed, Nidec contacted Nissan to express its interest in taking a majority stake in JATCO. The answer was “no,” according to well-placed sources at Nidec and Nissan, as Nissan executives want to keep key electric axle technology in-house. Nissan declined to comment on the matter.

At the end of December, Seki resigned from Nissan and on January 13 of this year he boarded the high-speed train to Kyoto, eventually assuming the post of President and COO of Nidec. Among Seki’s first tasks: recruiting more talent from Nissan, which he did by bringing in some of his former colleagues, and completing the JATCO buyout.

In February, Nidec contacted Nissan again about the JATCO acquisition, and once again Nissan’s response was “no,” said the same sources at Nidec and Nissan. According to these sources, Nissan COO Ashwani Gupta told Seki and other Nidec executives that Nissan considers JATCO to be “one of our core technology skills” and only wants to talk about training a alliance to collaborate in the development of new generation electric axle technology. The sources said Gupta added that if Nissan was in desperate need of cash, it would sell its 1.5% stake in Daimler AG before selling its stake in JATCO. Nissan declined to comment.

Nissan repeated the message on August 6 when two Nidec officials visited the automaker’s world headquarters in Yokohama, one of the well-placed sources said. Then on August 19, Gupta told JATCO head office staff that JATCO was “a great asset to Nissan” and a “partner.” JATCO spokeswoman Masako Fujita confirmed the gist of Gupta’s remarks.

Nagamori remains confident about the outlook for Nidec’s electric axle business. It is expected to inject 500 billion yen into the creation of factories in China, Mexico and Poland and invest in technology. And Nidec is engaged in what some competitors describe as aggressive pricing by reducing its price to automakers to around $ 1,200 to $ 1,300, well below the estimated industry average cost of $ 1,800.

Nidec has signed supply agreements with Geely, as well as with GAC Motor and its joint ventures with Toyota Motor Corp and NIO, the Chinese EV manufacturer. Nidec is also said to have recently entered into additional agreements to supply Geely’s joint venture with Daimler and a joint venture between Great Wall Motor and BMW. Nidec declined to comment on the alleged deals. He also declined to comment on the prices.

report by Norihiko Shirouzu; additional reporting by Makiko Yamazaki in Tokyo and Paul Leinert in Detroit; edited by Janet McBride

Original © Thomson Reuters Corporation

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