Key facts
- Nidec is expected to record an impairment loss of up to 1 trillion yen ($6.3 billion).
- The loss is primarily related to traction motor systems for electric vehicles.
- The charge could erase the company's cumulative profits from the past decade.
- Nidec shares plunged as much as 18% following the report.
- President Mitsya Kishida is expected to be dismissed.
- Nidec has faced mounting corporate governance challenges and improper conduct disclosures.
Japanese motor maker Nidec is poised to recognize a substantial impairment loss, potentially reaching 1 trillion yen ($6.3 billion), primarily due to issues with its electric vehicle traction motor systems. This significant write-down, reported by Nikkei and other publications, could effectively wipe out the company's cumulative profits from the last decade. The news sent Nidec's shares plunging as much as 18% on Monday. The company has been grappling with a prolonged accounting and management crisis, including disclosures of improper conduct and quality control issues. In response to these ongoing corporate governance challenges, Nidec has reportedly decided to dismiss President Mitsya Kishida, with an announcement expected soon. Nidec, a major supplier to the global automotive industry and the world's largest manufacturer of precision motors, has seen its reputation suffer due to these scandals. The company's shares have been removed from the Nikkei 225 index, and it faces the possibility of delisting.