«A red ocean»: after 470 million in losses, Stellantis' partner in European electric motors wants to pull out

The story was to last several decades. In 2017, Carlos Tavares and the directors of the Japanese group Nidec declared their shared ambition: to make their partnership one of the pillars of the electrification of the automotive industry. Stellantis. Almost ten years later, this strategic alliance is faltering. Faced with a major internal crisis and colossal losses in electric motors, Nidec now wants to turn the page.

For Stellantis, the stakes are high: it's not just a question of changing supplier, but of safeguarding the future of Emotors, the joint venture that currently produces part of the group's electric motors in France.

The scandal that weakens the Japanese giant

For several weeks now, Nidec has been going through the most serious crisis in its history. An internal investigation, followed by an independent report, has highlighted questionable practices within the Japanese group. According to the investigations, more than 1,000 cases of irregularities have been identified since 2020. In the majority of cases, materials, manufacturing processes or product designs were modified without prior customer approval. Falsification of test data, quality control anomalies and errors concerning production sites have also been identified.

This case comes on the heels of a previous accounting scandal. An independent commission concluded that the group's profits had been artificially inflated to the tune of 160.7 billion yen, or around one billion dollars, up to mid-2025. The report points the finger of blame squarely at Nidec's long-standing founder, Shigenobu Nagamori, who is accused of exerting excessive pressure on teams to achieve ever more ambitious financial targets. Although Nidec claims that no security problems have yet been detected with its products, the affair has seriously damaged the company's reputation.

Electric motors business turns loss-making

But scandal is not the only reason for this change of direction. The real problem is also economic. Long considered to be one of Nidec's most strategic projects, the development of e-axles - assemblies integrating electric motor, power electronics and gearbox - has turned into a money pit.

Nidec president Mitsuya Kishida recently acknowledged that this market had become a «red ocean», in other words, a saturated sector where competition is fierce and margins extremely low. The figures speak for themselves. In the first half of its fiscal year, Nidec recorded a loss of 87.7 billion yen, or around 470 million euros, in its e-axles business. Between provisions for loss-making contracts and depreciation of industrial tools, the expected profitability never materialized. Faced with this situation, the Japanese group has decided to undertake a far-reaching restructuring and now wishes to withdraw completely from this activity.

After China, Stellantis is directly concerned

Nidec has already announced its intention to terminate its Chinese joint venture with GAC in 2019. But Europe is also in its sights. According to information revealed by Nikkei Asia and then picked up by Reuters, Mitsuya Kishida confirmed that Nidec was also planning to exit its joint venture with Stellantis.

This declaration marks a major turning point for the automaker. For several years now, Emotors has been one of the essential links in its electrification strategy.

Created in 2018, this company is owned equally by Stellantis and Nidec. Its headquarters and research center are located in Carrières-sous-Poissy, while production takes place at the Trémery plant in Moselle. This plant is not just any old site: formerly specialized in diesel engines, it has been transformed to become one of Europe's leading production centers for electric motors. Production capacity is set to exceed one million units per year. Emotors power all the Group's European models. Peugeot, Opel, Fiat, Citroën...

Stellantis probably has no choice but to take over Emotors

Unlike the Chinese joint venture with GAC, however, the situation in Europe appears different. It seems hard to imagine Stellantis abandoning such a strategic activity, when the electrification of its range remains a major objective. Industrial facilities already exist, engineering teams are in place and several vehicle programs are directly dependent on technologies developed by Emotors.

The most logical solution would therefore be to buy out Nidec's shares. Such an operation would enable Stellantis to take full control of the company and secure its supply chain for electric motors. For the manufacturer headed by Antonio Filosa, the operation could even represent an opportunity. While Nidec is seeking above all to rapidly exit a loss-making business, Stellantis would be able to recover industrial know-how that is already operational and fully integrated into its future electric models.