(Kiyoshi Ota/Bloomberg Information)
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Nissan Motor Co. shares jumped after the Monetary Instances reported {that a} high-level Japanese group has drawn up plans to hunt funding from Elon Musk’s Tesla Inc. to help the struggling carmaker.
The group believes the electrical car maker is fascinated by buying Nissan’s crops within the U.S., the newspaper reported, citing folks it didn’t determine. The proposal envisions a consortium of traders, with Tesla as the biggest backer, but in addition consists of the potential for a minority funding by Hon Hai Precision Trade Co. to forestall a full takeover by the Apple provider, the report stated.
Nissan’s shares jumped greater than 12% on the information of the potential funding, earlier than closing 9.5% larger in Tokyo.
Nissan has discovered itself in want of a lifeline as soon as once more after a take care of Honda Motor Co. to mix each manufacturers underneath a single holding firm formally ended earlier this month. Whereas Nissan is now on the hunt for a brand new accomplice — CEO Makoto Uchida has stated it will be tough to outlive with out one — the thought of a tie up with Tesla was met with skepticism from business watchers.
The Tesla manufacturing unit IS the product.
The Cybercab manufacturing line is like nothing else within the automotive business.
— Elon Musk (@elonmusk) February 21, 2025
That’s partly on account of Tesla’s personal struggles as EV demand slows: Final month it reported a drop in annual gross sales for the primary time in additional than a decade, and it has reduce greater than 10% of its workforce. However shopping for a stake in one other carmaker could be a notable change from its common investments, which concentrate on companies that help its high-tech EV ambitions.
It’s additionally unclear which Nissan belongings could be a draw. The automaker has three crops within the U.S. and has beforehand warned it could sluggish a deliberate ramp-up of EV manufacturing at its facility in Canton, Miss., on account of uncertainties about vitality and commerce insurance policies underneath Donald Trump’s presidency.
“For Tesla, it’s tough to assume there are any deserves in shopping for Nissan,” stated Yasuhiko Hirakawa, head of funding at Rakuten Funding Administration Inc. “It clearly has no want for legacy belongings like engines and meeting traces. It’s tough to think about one thing Tesla wants that Nissan can supply.”
The proposal is being led by Hiromichi Mizuno, former chief funding officer of the Japan’s Authorities Funding Fund, who was on Tesla’s board as an impartial director from 2020 to 2023, the FT reported. The push can also be stated to be supported by ex-Prime Minister Yoshihide Suga, it stated.
A Nissan spokesperson declined to touch upon the report. Tesla didn’t instantly reply to an emailed request for remark. Mizuno and a consultant for Hon Hai didn’t instantly reply. Suga’s workplace didn’t instantly reply to a request for remark.
Musk responded to the report on X, his social media platform, saying the “Cybercab manufacturing line is like nothing else within the automotive business.”
The fallout of the scrapped take care of Honda has been particularly pointed for Nissan, which has suffered from weak gross sales, overcapacity, an outdated lineup of unpopular fashions and revolving-door management for the reason that 2018 ouster of Carlos Ghosn.
However regardless of Nissan’s challenges, its huge manufacturing operations and model recognition are nonetheless engaging suitors.
Foxconn, as Hon Hai is extra generally identified, has expressed renewed curiosity in Nissan after the take care of Honda collapsed, and Bloomberg Information reported earlier this month that KKR & Co. is weighing an funding in Nissan.
The carmaker continues to face dangers from its restructure in addition to the difficult geopolitical panorama. Moody’s Rankings on Feb. 21 reduce its credit standing to speculative-grade and maintained a unfavorable score outlook.
“Whoever the customer is, Nissan’s restructuring is unavoidable,” stated Rieko Otsuka, a strategist at MCP Asset Administration Japan.
