Japan's Nidec Corporation said it plans to spend US$500m to expand production capacity for electric traction motors for battery powered vehicles in China, according to the Nikkei business daily.

A new facility is expected to be built in Jinpu New Area in the port city of Dalian in Liaoning Province after executives at Nidec and senior officials of the Dalian municipal government signed a memorandum of understanding earlier this month at the company's headquarters in Kyoto, Japan.

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The new plant is scheduled to become operational in 2021, to become Nidec's second facility in the country dedicated mainly to traction motors for EVs, though its planned capacity has not yet been disclosed.

Nidec's first dedicated Chinese electric motor plant came on stream earlier this month in Zhejiang Province with a capacity of 600,000 units per year, which the company plans to double with an additional investment of around US$270m.

Nidec is Japan's largest manufacturer of precision electric motors, from miniature units for electronics to motors for all automotive applications. It also makes other electronic based products, from manufacturing equipment and controls, actuators, robots to testing and inspection equipment.

The acquisition of Elesys in 2014 significantly strengthened the company's electronics capabilities.

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Earlier this month Nidec agreed to acquire Omron Corporation's automotive electronics business for JPY100bn (US$893m) as it looks to double its annual automotive sector turnover by fiscal 2021 to JPY600bn by focusing increasingly on parts and systems for electric and hybrid powertrains and autonomous driving.

The company's president Hiroyuki Yoshimoto, at an earnings briefing last week, pointed out that "China is a massive market and a leader in electric vehicles". 

Sales of new energy vehicles (NEVs), comprising mainly battery powered and hybrid vehicles, in China are forecast to rise to around 7m units by 2025 from 1.3m units last year.