Benzinga | Nov 2, 2020 01:45AM EST

Nidec To Build $2B Electric Vehicle Motor Factory For Europe: Report

Nidec Corporation (OTC:NJDCY) will build a $1.9 billion plant in Siberia to manufacture motors for electric vehicles in a bid to consolidate its presence in the European markets, Nikkei Asia reported Monday (Tokyo Time).

What Happened: The Japanese manufacturer is negotiating plans for a factory and a research center with local authorities, according to Nikkei.

The plant will reportedly produce 200,000 units to 300,000 units by 2023 and emerge as one of the largest such production hubs in Europe.

Kyoto-based Nidec also plans to make EV motors in France and Poland, as per Nikkei.

Why It Matters: Sales of EVs and plug-in hybrids increased by 62% over the year to 399,000 units, according to data by the European Automobile Manufacturers Association, as cited by Nikkei.

Sales of electric cars in Europe are set to rise by threefold this year compared with last, according to Transport & Environment, a green policy group.

In Germany, EV market-leader Tesla Inc (NASDAQ:TSLA) beat domestic rivals such as Bayerische Motoren Werke AG (OTC:BMWYY) and Volkswagen AG (OTC:VWAGY) as it registered the most deliveries between September 2019 to October 2020.

Europe has emerged, along with China, as a top market for EVs, noted Nikkei.

Tesla supplier LG Chem's CEO Hak Cheol Shin told Reuters that the company is looking for a new battery factory in Europe.

The South Korean battery maker has benefitted from a spike in the sale of Renault SA's (OTC:RNLSY) Zoe vehicles in Europe.

Price Action: Nidec Corp.'s OTC shares closed 3.58% lower at $25.29 on Friday.