Nidec’s Record $9 Billion Stock Crash Explained: What It Reveals About EV Supply Chains No One Saw Coming

Japanese manufacturing giant Nidec saw its market value plummet by a staggering $9 billion in a single day, marking one of the worst crashes in the company’s history.

The sudden collapse was triggered by a severe profit warning, and it’s sending a major shockwave through the global electric vehicle (EV) industry, revealing a critical weakness that few were paying attention to.

Nidec is one of the world’s most important suppliers of electric motors, specifically the “e-axle” systems that are the heart of a modern EV.

In its statement, the company blamed its poor outlook on a sharp slowdown in demand from China’s EV market and what it called “excessive competition” that was crushing prices.

For years, the conversation around EV supply chain risks has focused almost entirely on one thing: batteries. Experts and automakers worried constantly about shortages of lithium, cobalt, and nickel. But Nidec’s crisis exposes a completely different problem that no one saw coming.

The bottleneck isn’t a lack of supply anymore; it’s a sudden and brutal collapse in demand and profitability for other critical components. According to a detailed report by Reuters on the company’s forecast, the issue is a classic case of overly optimistic projections meeting harsh market reality.

The core of the problem lies in the fierce EV price war raging in China, the world’s largest auto market. Dozens of automakers are slashing prices in a desperate battle for survival, and they are passing that pressure down the supply chain.

This forces critical suppliers like Nidec to sell their advanced e-axle systems for lower and lower prices, destroying their profit margins. This isn’t just a gentle market correction; it’s a race to the bottom that is claiming casualties far from the showroom floor.

The Nidec stock crash is a canary in the coal mine for the entire EV industry. Many suppliers, encouraged by bullish forecasts from automakers, have invested billions in new factories to scale up production. Now, with demand growth sputtering and prices falling, they are facing the nightmare scenario of expensive, underutilized plants.

What this record-setting stock crash reveals is that the road to an all-electric future is far more volatile than predicted. The industry’s biggest vulnerability may not be a shortage of raw materials for batteries, but a brutal, profit-killing price war that starts in China and ripples outwards, hitting the very companies that build the guts of the EV revolution.

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