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how one tech firm is pushing into electric vehicles By Reuters

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© Reuters. FILE PHOTO: Nidec Corp’s logo is pictured at an earnings results news conference in Tokyo

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By Norihiko Shirouzu

(Reuters) – The miniature motors that make iPhones buzz on silent helped power Japan’s Nidec (T:) to become a 1.5-trillion-yen ($14 billion) company.

In recent years, Nidec’s founder Shigenobu Nagamori has turned his attention to autos, and a technology which turns electricity stored in the battery into propulsion power.

This technology, called an e-axle or e-drive, is emerging as a new competitive front as the auto industry shifts to electric vehicles. By 2030, Nagamori says he wants a 35% slice of a global e-axle market that is forecast to be worth $20-30 billion a year by then, up from an estimated $2.8-$3 billion now.

He is betting that electric cars will follow the same route as room aircons, washing machines and computers, with key components, such as motor systems and central processing units, standardized and supplied by a few dominant tech firms.

“Laptops and aircons from different makers might look different outside, but you look inside, the (key) parts are all more or less the same. The gut technologies of EVs are going to become as commoditized or standardized” as these items, Nagamori told an earnings news conference earlier this year. E-axles and batteries will come from a few competitive suppliers, he predicted.

To ensure Nidec emerges as one of these suppliers, Nagamori, a no-nonsense 76-year-old, has set his sights on acquiring gear-maker JATCO from Nissan (OTC:) Motor Co (T:) and combining it with Nidec’s motor and power-control electronics business. Some details of this effort, which Nissan is resisting, are reported here for the first time. The takeover battle underscores how quickly electrification is reshaping the auto industry.

“Nidec brings to the auto industry the tech industry’s approach,” says Daiwa Securities analyst Shiro Sakamaki. “Like cell-phones and laptops, car models are already being redesigned at an increasingly rapid pace, and Nagamori is betting that trend will accelerate and automakers are going to leave the development and manufacturing of technologies such as the e-axle to suppliers.”

Nagamori declined to be interviewed for this article. Nidec declined to comment about its pursuit of JATCO.

A SHORT HISTORY OF THE E-AXLE

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

In other words, a well-designed e-axle maximizes a vehicle’s power efficiency and acceleration and helps extend its driving range and its smoothness.

The technology has emerged as a competitive front in part because automakers are under pressure to cut electric vehicles’ manufacturing costs to make them as affordable as mainstream gasoline cars. E-axle systems and batteries present the industry with the biggest margins for efficiency gains and cost savings.

Advances in new technologies are critical to global efforts to cut CO2 emissions. Vehicle-based CO2 emissions account for roughly 17% of emissions from all sources, according to Zifei Yang, an analyst at the International Council on Clean Transportation in Washington. Moreover, says Yang, the rate of reduction in vehicle emissions has slowed as more people drive bigger, 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 in mopeds for cars.

Some automotive technology suppliers have combined efforts to make e-axle systems. Japan’s Denso and Aisin formed a joint venture called BluE Nexus in 2019 and Toyota earlier this year moved to invest in the company, taking a 10% stake. This year U.S. parts supplier BorgeWarner agreed to acquire UK-based Delphi, and Japan’s Hitachi (OTC:) Automotive merged with three Honda group suppliers. Automakers Volkswagen (DE:) and Ford, and Toyota and smaller Japanese brands are each forming an EV technology alliance in part to drive down e-axle manufacturing costs.

Tesla (NASDAQ:) initially developed its own e-axle technology. Reuters couldn’t determine whether it continues to use it in more recent models.

GM, Nissan and some other carmakers believe e-axles offer such a large margin for cost efficiencies and product differentiation that they want to design and manufacture their own systems. GM believes it can better integrate the e-axle with the battery and the rest of the vehicle, making for a quieter, smoother and more economical drive, said Adam Kwiatkowski, GM’s executive chief engineer for global electrical propulsion systems.

“Technologies in a vehicle that are technically complicated, house a whole bunch of IP, 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 e-axles, Kwiatkowski added, it will have to buy them, it won’t be sure of their technical details or efficiency and will be locked into drive unit designs that may not be optimal.

A DIFFERENT APPROACH

Nidec’s Nagamori has said he believes the way to become a market leader in e-axles is to focus on making the technology inexpensive. The way to do that, he says, is by being able to produce every component and sub-technology that goes into an e-drive system, and by building up scale to produce more.

That’s in part why Nidec, a motor specialist, has been on the hunt for firms with an expertise in power electronics. It acquired automotive electronic control system producer Honda Elesys Co from Honda in 2014 and the automotive electronics division of Japan’s Omron Corp in 2019.

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

According to two sources familiar with Nagamori’s thinking, Nidec’s founder believes JATCO is in play because of financial problems at Nissan that have already forced the automaker to sell non-essential assets, including its fleet of corporate jets.

Over the past year, Nidec has poached several Nissan executives, including its former vice-COO Jun Seki.

Nagamori succeeded in hiring Seki shortly after he was passed over for Nissan’s top job last year. News emerged late on Oct 8, 2019 that Makoto Uchida had been chosen as Nissan’s new global chief. The following morning, Seki received a call from a headhunter, said one of the sources. Nagamori wanted to sit down with him.

Shortly thereafter, Seki traveled to Kyoto to meet Nagamori, intending to rebuff the approach, the source said. Instead, Nagamori talked Seki into considering 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 talks between the two men progressed, Nidec contacted Nissan about its interest in taking a controlling stake in JATCO. The answer was “no,” according to well-placed sources at Nidec and Nissan, because Nissan’s top executives want to keep key e-axle technology in house. Nissan declined to comment about the matter.

By late December Seki resigned from Nissan, and on Jan 13 this year he boarded the bullet train to Kyoto, to eventually assume the position of Nidec’s president and COO. Among Seki’s first tasks: recruit more top talent from Nissan, which he did by bringing in a few of his former colleagues, and finish the takeover of JATCO.

In February, Nidec approached Nissan again about acquiring JATCO, and once more Nissan’s answer was “no,” said the same well-placed sources at Nidec and Nissan. According to these sources, Nissan’s COO Ashwani Gupta told Seki and other Nidec executives that Nissan considers JATCO “one of our core technological competences” and is only interested in talking about forming an alliance to collaborate on developing next-generation e-axle technology. The sources said Gupta added that if Nissan were desperate for cash, it would sell its 1.5% stake in Daimler AG (DE:) before selling its stake in JATCO. Nissan declined to comment.

Nissan repeated the message on Aug 6 when two Nidec managers visited the carmaker’s global headquarters in Yokohama, one of the well-placed sources said. Then, on Aug 19, Gupta told staff at JATCO’s head office that JATCO is “an important asset for Nissan” and a “partner.” JATCO spokeswoman Masako Fujita confirmed the gist of Gupta’s remarks.

Nagamori remains confident about the prospects for Nidec’s e-axle business. He is set to pump 500 billion yen into setting up factories in China, Mexico and Poland and investing in the technology. And Nidec is engaged in what some competitors describe as aggressive pricing by cutting its price to automakers to about $1,200 to $1,300, well below the industry’s estimated average cost of $1,800.

Nidec has signed supply deals with Geely, as well as GAC Motor and its joint ventures with Toyota Motor (NYSE:) Corp and Chinese EV upstart NIO. Nidec is also rumoured recently to have landed additional deals to supply Geely’s joint venture with Daimler (OTC:) and a joint venture between Great Wall Motor and BMW. Nidec declined to comment on the rumored deals. It also declined to comment about pricing.

(reporting by Norihiko Shirouzu; additional reporting by Makiko Yamazaki in Tokyo and Paul Leinert in Detroit; editing by Janet McBride)





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Earnings nudge European stocks higher, virus concerns limit gains By Reuters

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© Reuters. FILE PHOTO: The German share price index DAX graph at the stock exchange in Frankfurt

(Reuters) – European stocks inched higher on Friday, boosted by positive earnings updates from Barclays and carmakers, while nagging concerns about the economic impact of surging COVID-19 cases put markets on course for weekly losses.

The pan-European STOXX 600 index () rose 0.2% by 0711 GMT, with Asian markets stuck in a trading range as investors treaded with caution with less than two weeks to go before the U.S. presidential election.

London’s FTSE 100 () was supported by a 2.8% jump in Barclays (L:) after it reported much better than expected quarterly earnings.

Carmaker Daimler (DE:) rose 1.9% after it raised its 2020 profit outlook, while Renault (PA:) was up 1.5% after saying it should have positive cash flow from cars by the end of 2020 as sales recovered.

However, gains were limited as France looked set to widen a curfew to more than two thirds of its population after the country set an all-time daily high of new coronavirus cases on Thursday.

IHS Markit’s early reading of euro zone and UK business activity for October is due later in the day.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Australia stocks lower at close of trade; S&P/ASX 200 down 0.11% By Investing.com

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© Reuters. Australia stocks lower at close of trade; S&P/ASX 200 down 0.11%

Investing.com – Australia stocks were lower after the close on Friday, as losses in the , and sectors led shares lower.

At the close in Sydney, the fell 0.11%.

The best performers of the session on the were Bluescope Steel Ltd (ASX:), which rose 10.86% or 1.560 points to trade at 15.920 at the close. Meanwhile, Cooper Energy Ltd (ASX:) added 4.35% or 0.015 points to end at 0.360 and Santos Ltd (ASX:) was up 3.94% or 0.200 points to 5.280 in late trade.

The worst performers of the session were Iluka Resources Ltd (ASX:), which fell 48.28% or 4.780 points to trade at 5.120 at the close. Regis Resources Ltd (ASX:) declined 4.32% or 0.210 points to end at 4.650 and United Malt Group Ltd (ASX:) was down 3.49% or 0.15 points to 4.15.

Rising stocks outnumbered declining ones on the Sydney Stock Exchange by 648 to 640 and 340 ended unchanged.

Shares in Iluka Resources Ltd (ASX:) fell to 3-years lows; losing 48.28% or 4.780 to 5.120.

The , which measures the implied volatility of S&P/ASX 200 options, was down 1.95% to 19.015.

Gold Futures for December delivery was up 0.11% or 2.10 to $1906.70 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in December fell 0.74% or 0.30 to hit $40.34 a barrel, while the December Brent oil contract fell 0.64% or 0.27 to trade at $42.19 a barrel.

AUD/USD was down 0.08% to 0.7109, while AUD/JPY fell 0.20% to 74.45.

The US Dollar Index Futures was up 0.11% at 93.067.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Asian Stocks Up, After “Slightly More Civilized” Trump-Biden Debate By Investing.com

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© Reuters.

By Gina Lee

Investing.com – Asia Pacific stocks were mostly up on Friday morning, with investors digesting the final presidential debate between President Donald Trump and Democratic candidate Joe Biden ahead of the Nov. 3 presidential election.

“It was a slightly more civilized debate this time around, but Trump failed to make up for lost ground from the first debate. Biden came through better than Trump in this debate and this should help to cement his lead over Trump and may just help him to cross the final line with a win,” OCBC Wealth Management senior strategist Vasu Menon told Reuters.

Japan’s was up 0.43% by 11:10 PM ET (3:10 AM GMT) and South Korea’s gained 0.50%.

In Australia, the inched down 0.10% and Hong Kong’s rose 0.60%.

China’s edged up 0.20%, while the inched down 0.04%.

Some investors warned of market volatility ahead as markets in the region opened.

“There will be a positive bias to the opening tone in Asian trade,” CommSec market analyst Tom Piotrowski told Reuters.

“But regional investors won’t necessarily hang their hats on that outcome, the markets can move around quite quickly,” he added.

Other developments in Washington on investors’ radar is progress on the latest stimulus measures. Continuous, staunch Republican opposition to the measures’ price tag makes the likelihood that Congress will pass them before the election slim. However, U.S. House of Representatives Speaker Nancy Pelosi continued to be optimistic that a deal can be reached soon.

Pelosi and Treasury Secretary Steven Mnuchin are “just about there” vis-a-vis a deal and are currently resolving how to allocate money for testing and tracing to safely reopen schools and the economy, a key part of the measures.

The continuing uncertainty has a big move in the bond market over expectations that a deal will materialize soon.

“The big move in the bond market has been going on for the past few days and it’s mostly because the market is expecting that one way or another there will be a stimulus package, if not before the election then after the election” Yardeni Research president and chief investment strategist Ed Yardeni told Bloomberg.

There are over 41.5 million COVID-19 cases globally as of Oct. 23, according to Johns Hopkins University data. In Europe, which is fighting a second wave, Germany recorded a record number of cases and Spanish health minister Salvador Illa warned that the spread of the virus is out of control in certain parts of his country.

Stocks received a boost, however, from the news of the first approved COVID-19 treatment, after Gilead Sciences (NASDAQ:) received FDA approval on Thursday for its antiviral therapy Veklury (remdesivir) to treat the virus. The approval is for the use of remdesivir in adult and pediatric patients 12 years of age and older weighing at least 40 kilograms (around 88 pounds), the FDA said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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