Nidec, which is known for making precision motors used in computer hard drives and smartphones, will build the manufacturing centre in Novi Sad, northern Serbia, with completion of the first two factories employing 1,200 people expected in 2022, Jun Seki, Nidec's chief operating officer told at a news conference.
"Eventually we will need 10,000 workers," Seki said. The site will bring together manufacturing capacity currently spread across Europe, he added.
The investment comes as the Japanese company looks to capture a third of the market for energy-saving electric motors, known as e-axles.
Demand is expected to expand by 10 times over the next decade as carmakers accelerate a shift to EV production amid tightening restrictions on carbon emissions and increasing demand from consumers. Nidec supplies e-axles to automakers including China's GAC Motor and France's Peugeot SA, competing for business with the likes of Germany's Bosch and Toyota affiliate BluE Nexus.
Nidec in February announced the 30 billion yen acquisition of a cutting tool business from Mitsubishi Heavy Industries as part of efforts to bolster its EV motor business.
($1 = 109.5000 yen)
(Reporting by Yuki Nitta and Tim Kelly; editing by Jason Neely)