Nidec, a major Japanese motor manufacturer, announced a staggering net loss of 564 billion yen ($3.6 billion) for the fiscal year ended March 2026, marking a dramatic reversal from the previous year’s 84 billion yen profit. The loss stems primarily from massive impairment charges related to the company’s struggling electric vehicle motor business, underscoring the mounting costs of its expansion into the highly competitive EV sector.
The company’s revenue grew modestly by 4 percent to 2.7 trillion yen, but this was overshadowed by an operating loss of 518.9 billion yen. Impairment losses totaled 632 billion yen, with 335.1 billion yen attributed to appliance, commercial and industrial products, and 231 billion yen related to automotive products.
Strategic Retreat from E-Axle Market
The losses reflect Nidec’s decision to exit the electric axle, or e-axle, business — a sector the company had once positioned as a cornerstone of future growth. In May, Nidec announced it would withdraw from the e-axle market and dissolve its joint venture with China’s Guangzhou Automobile Group, citing intensifying price competition and margin compression in the segment.
Former Chief Executive Mitsuya Kishida had characterized the market as plagued by “cutthroat competition,” signaling management’s assessment that the e-axle sector had rapidly commoditized and become financially unviable. The retreat marks a sharp reversal of Nidec’s founder-led expansion strategy that had driven aggressive investments into automotive powertrains in recent years.
Leadership Change and Accounting Scandal
Nidec announced a new chief executive on Tuesday, replacing Kishida with Chief Technology Officer Michio Kaida, as the company seeks to rebuild management credibility following a major accounting scandal. Kishida, who joined Nidec from Sony in 2022 and became CEO in 2024, resigned after an investigation uncovered multiple instances of financial misconduct.
An independent committee found that executives had attempted to avoid impairment losses and delayed recognizing inventory write-downs. The company’s auditor, PwC Japan, issued a disclaimer of opinion, stating it was unable to obtain sufficient audit evidence to support the consolidated financial statements.
The disclosure delays forced Nidec to postpone releasing its financial results earlier this year. The company said some of Kishida’s statements and conduct related to financial reporting “could not necessarily be regarded as appropriate,” signaling the need for heightened ethical standards under its new governance structure.
Financial Resilience Amid Challenges
Despite the scale of losses, Nidec maintained over 1.7 trillion yen in shareholder equity as of September 2025 and had secured 600 billion yen in commitment lines from major Japanese banks, providing a financial cushion as the company navigates restructuring.
Kaida, who helped lead Nidec‘s corporate reform efforts and preparations for a business improvement plan submitted to the Tokyo Stock Exchange, faces the challenge of stabilizing the company’s finances while refocusing on higher-margin core motor businesses. The company’s retreat from the e-axle sector will likely prompt automakers and suppliers to reassess their sourcing strategies, potentially accelerating broader consolidation in the EV powertrain supply chain.
