Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: Invent Head on automotive takeaways from CES 2023
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • Capgemini: The circular economy is spurring new thinking on EV batteries
    • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Focus on Electrification
November 22, 2022 04:21 AM

Mazda will invest $11B into electrification in catch-up plan

Mazda's investment is aimed at catching rivals in the race for new electrification technologies.

Hans Greimel
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Mazda concept Vision Study model
    MAZDA

    Mazda has teased a new sports car design exercise called the “Vision Study Model.” The rear-slung coupe cuts a silhouette reminiscent of the RX-7 or RX-8.

    TOKYO – Electric vehicle laggard Mazda will invest 1.5 trillion yen ($10.6 billion) into electrification through 2030 with new partnerships targeting everything from batteries and motors to computer chips in an attempt to catch up in global race for new technologies.

    The plan could include EV production in the U.S. as early as 2026-2027, the second phase of the company’s just-updated mid-term business plan, CEO Akira Marumoto said.

    Under the strategy, Mazda will partner with Envision AESC Group, a Tokyo-based battery maker that also has investments from Nissan.

    Another tie up on tap is a semiconductor partnership with Japanese electronics group Rohm for advanced inverter chips.

    Marumoto unveiled the new direction in a revised mid-term plan on Tuesday, conceding his small-sized automaker now envisions hotter EV demand than it earlier imagined.

    Mazda now expects EVs to comprise between 25 percent to 40 percent of its global sales in 2030. That is up from Mazda’s early outlook of EVs accounting for just a quarter of all volume. The roll out ramps up from 2028 with the major push of battery electrics.

    “Up to 2030, we will undertake a full-fledged launch of battery EVs,” Marumoto said, adding that the shift will include EV introductions in China and other global markets.

    Mazda is also considering U.S. production of electric vehicles in this timeframe, Marumoto said. It is studying the requirements set forth by the recently introduced Inflation Reduction Act, or IRA, to see how it can qualify for the EV tax credits afforded makers of domestically produced EVs.

    “North America is the most important market for us,” Marumoto said. “There are still some unclear things about the IRA, and we need to have a better understanding of it.”

    Added Marumoto: “Given the importance of the market, we hope to manufacture EVs in North America at some point. But at the moment, we are thinking of the possibility in the second half of the phase 2.”

    That time frame would put it in the latter half of Mazda’s 2025-2027 phase two.

    Marumoto noted that Mazda already plans to produce a hybrid version of its CX-50 crossover at the company’s new assembly plant in Alabama, which is jointly run with Toyota.

    Better profitability

    Mazda, together with its partners, expects to invest 1.5 trillion yen ($10.6 billion) in the push, said Akira Koga, senior managing executive officer in charge of corporate strategy.

    Along with releasing the new plan, Mazda also teased a new sports car design exercise called the “Vision Study Model.” The rear-slung coupe cuts a silhouette reminiscent of the RX-7 or RX-8.

    Mazda will also introduce a new hybrid system, Marumoto said. And toward the end of the decade, Mazda will also consider investing in its own battery production.

    The automaker had originally hoped to announce the revision last spring. But the move was derailed by fresh uncertainty dumped on the market by the war in Ukraine, continuing pandemic lockdowns in China and ongoing upheaval in the global supply chain.

    Rapidly shifting regulatory frameworks – as exemplified by new EV incentives provided for in the U.S. Inflation Reduction Act – added to the unpredictable market direction.

    Marumoto’s refreshed mid-term plan includes the goal of achieving carbon neutrality by 2050 as well as a refreshed profit target. Mazda now wants to achieve a sustainable operating profit margin exceeding 5 percent in the fiscal year ending March 2026.

    That will be reached through improved supply chain management, improved logistics, more creative cost management and improved productivity through digitalization, Mazda said.

    Mazda’s move comes as the longtime internal-combustion stalwart wrangles with how to map out it future in the EV age. High-tech, high-efficiency gasoline and diesel engines have long been Mazda’s strong suit. And the company has only one EV and a handful of hybrids.

    The up-shift into EV mode comes as Mazda readies the rollout of a clutch of new crossovers, the CX-70 and CX-90 for the U.S. and the CX-60 and CX-80 for Europe, Japan and other markets. Those upcoming products will feature mild- and plug-in hybrid drivetrains.

    Mazda had earlier said it will dive deeper into electrification with another new platform around 2025 — a dedicated EV-only architecture that can scale to different sizes.

    Still, Marumoto declined to offer a specific target for EV sales in 2030, saying market demand will probably be fluid. He noted that somewhere between 60 percent and 75 percent of the market will still require an internal combustion engine, even by Mazda’s estimation.

    “We are not dismissing internal combustion vehicles,” he said. “We will have to respond flexibly.”

    Help from friends

    Seeking help from friends is one way Mazda, with its limited scale, can spread development and manufacturing costs. Among the partnerships announced in the mid-term plan is the team-up with Rohm, which will develop silicon-carbide power semiconductors for electrified cars.

    Another is a new joint venture called MHHO Electric Drive to develop electric drive units. It bands together suppliers Ondo, Hiroshima Aluminum Industry, and Hirotec.

    Another venture, called Mazda Imasen Electric Drive, will develop inverters. It will be a 50-50 deal between Mazda and Imasen Electric Industrial. A third will develop electric vehicles motors. MCF Electric Drive will join Mazda, Fukuta Electric & Machinery and Chuo Kaseihin.

    “We will proceed with electrification step by step with our partner companies,” Marumoto said. “We will need to have technologies for battery and electric drive units in-house.”

    Mazda’s new midterm plan stretches to 2030 and will prioritize revenue per vehicle and profitability over volume. Under its current plan, Mazda has said it expects global sales of all types of vehicles to rise to 1.8 million units in the fiscal year ending March 31, 2025.

    Marumoto did not offer a revised volume target. But assuming global sales at that level or higher in 2030, the new electrification plan would amount to as many as 720,000 EVs by then.

    Mazda plans to get there with the new EV platform debuting around 2025.

    Marumoto detailed the previous mid-term business plan in May 2019, targeting a sustainable operating profit margin of 5 percent by the fiscal year ending March 31, 2025.

    In the fiscal year ended March 31, 2022, Mazda booked an operating profit margin of 3.3 percent. But in the latest quarter of the current fiscal year, it zoomed up to 7.3 percent.

    Still, in the 2019 announcement, Mazda also downgraded its long-term sales goal in line with tougher realities. Mazda’s more modest goal of 1.8 million vehicles, was trimmed from an earlier vision for selling 2 million in the fiscal year ending March 31, 2024.

    Naoto Okamura contributed to this report

    RECOMMENDED FOR YOU
    New Toyota CEO Koji Sato faces big challenges in critical new era
    Recommended for You
    satoandakio.jpg
    New Toyota CEO Koji Sato faces big challenges in critical new era
    Tesla Model 3 red web_0.jpg
    UK has concerns over U.S. green subsidy act, finance minister says
    Renault Douai_Plant
    Renault will offer workers 7.5% pay increase, report says
    Capgemini Invent Head on automotive takeaways from CES 2023
    Sponsored Content: Capgemini Invent Head on automotive takeaways from CES 2023
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
      • ANE Eurostars
    • More
      • Publishing Partners
        • Capgemini: Invent Head on automotive takeaways from CES 2023
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us