Recent Investments Lead to Mitsubishi Electric Forming a New Automotive-Focused Business

Mergers and splits have become the pattern of the automotive industry over the last several years. After the madness of 2020, a lot of automakers also started investing into third-party companies to prepare for a new wave of model lineups that would require a lot more manpower and technology than these companies could muster alone. Like every other major automaker, the Renault-Nissan-Mitsubishi Alliance announced its Alliance 2030 plan to produce a whole new lineup of battery-electric vehicles (BEVs), and it’s been one investment after another. Now, Mitsubishi Motors Corporation (MMC) subsidiary Mitsubishi Electric is splitting up to restructure its company to focus on its technological developments and put the automotive business side under new management.

The Investments

When the Alliance announced the Alliance 2030 business plan, with it came the announcement of 35 new BEV models to be introduced to the collective lineup. A new electrical and electronic (EE) architecture was also announced for the future lineup, consisting of a total of five platforms to build new models on. Some are for budgetary and financial reasons, whereas others aim to provide a much larger all-electric range (AER) than its predecessors. Consumes always like to have choices, and the Renault-Nissan-Mitsubishi Alliance aims to provide them.

Of course, with the Alliance still producing gasoline-powered vehicles, it will eventually need to shift its focus to the new trend of the auto market. Or, even better, build a new company to oversee BEV development. That’s exactly what it did. Back in 2022, Renault announced business plans to construct a new BEV facility called Ampere. Already successful overseas, and managing 15 plants currently manufacturing parts, motors, batteries, the French automaker had no problem investing into Ampere. Nissan, already in a mutually beneficial relationship with Renault was happy to invest into Ampere (currently $640.98 million). All eyes were on Mitsubishi Motors, wary of spending more money before it launched the Mitsubishi Colt (a Renault Clio rebadge), but in October 2023, the Japanese automaker joined the party with an investment of $214 million.

A new BEV facility also calls for a steady supply of BEV batteries and power modules. Mitsubishi Electric was on top of it with an investment into Coherent to supply the company with Silicon carbide (SiC) power devices. Mitsubishi Electric already has some experience with SiC power modules, known for powering home appliance since launching the world’s first SiC power modules for air conditioners in 2010, and a leader in providing SiC power modules for high-speed trains since 2016. Known for offering lower energy loss, higher operating temperatures, and faster switching speeds, SiC power devices are just one of several emerging technologies sought after for the global expansion of the BEV auto market. Securing these devices for Misubishi Motors and the Alliance overall are a huge win.

The Split

With all this going on, Mitsubishi Electric has decided to split up the company to focus on its development of technology and other products. Known for a lot of the technology that pops up in Mitsubishi models, Mitsubishi Electric now has SiC power modules and BEV technology on its plate. Instead of over-burdening itself with this and developing tech for Mitsubishi Motors, Mitsubishi Electric is splitting up its automotive-equipment business and assets to a new wholly owned subsidiary, Melco Automotive Equipment Business Split Preparation Corporation (also known as the “Prep Company”). Scheduled to go into effect in April 2024, Mitsubishi Electric will be focusing on the adjustment of its business portfolio and strengthening its business structure to develop new products and assets. With the goal of streamlining its decision-making and accelerate transformation of the business to develop new products, Mitsubishi Electric will be shifting its focus to CASE vehicles, or BEVs that feature connected, autonomous, and shared content and services. The auto market is rapidly changing on a global scale, and CASE vehicles are going to become the next big thing after BEVs became more abundant and practical.

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Photo Source/Copyright: Mitsubishi Electric