Japanese electric motor manufacturer, Nidec is planning an estimated 100 billion yen ($715 million) investment in the construction of a plant in Mexico as it looks to increase its exposure to the expanding local electric vehicle (EV) market.

This was revealed by Shigenobu Nagamori, Nidec's chairman and CEO, in an interview with Nikkei Asia.

The proposed plant will focus on the production of power trains and electric axles for electric vehicles and construction is expected to begin during or after the next business year starting in April.

The electric axle (e-axle) systems are a compact, electric drive solution for battery-electric vehicles and hybrid applications. The electric motor, power electronics and transmission are combined in a compact unit directly powering the vehicle's axle making electric drives less complex but simpler.

The Kyoto-based company currently produces these electric train axles in China and Europe but is gearing up to start production in North America well ahead of an expected surge in demand.

It had previously predicted it would produce 1.2 million units of "e-axle" in the 2023 financial year, more than double the number planned for its 2022 business year, in response to soaring demand. It is now planning to augment its "e-axle" production capacity to 7 million per year globally by March 2026.