A group of influential Japanese figures is reportedly trying to orchestrate a deal that would see Tesla invest in Nissan, but Elon Musk's public reaction suggests the proposal faces significant hurdles.
Political and Business Heavyweights Behind the Push
According to The Financial Times, the initiative is being spearheaded by a "high-level Japanese group" including former Prime Minister Yoshihide Suga and Hiro Mizuno, a former Tesla board member. Several Nissan board members are reportedly aware of the proposal.
Strategic Rationale: Tesla and Nissan's US Plants
The group believes Tesla might be interested in acquiring Nissan's US manufacturing facilities, with the aim of positioning Tesla as the largest investor in a consortium. This consortium could also include Foxconn, the contract electronics manufacturer, which has reportedly explored acquiring a stake in Nissan.
Musk Shoots Down the Idea on Social Media
Elon Musk appeared to dismiss the idea on X (formerly Twitter), stating, "The Tesla factory IS the product." He added, "The Cybercab production line is like nothing else in the automotive industry." This suggests Musk is not interested in acquiring Nissan's existing plants.
Nissan's US Manufacturing Footprint
Nissan operates three US plants located in Canton, Mississippi, and Smyrna and Decherd in Tennessee. These facilities produce models such as the Nissan Rogue (X-Trail), Pathfinder, Murano, Leaf, and Frontier, as well as the Infiniti QX60.
Notably, all three are non-union facilities, mirroring Tesla's US plants. However, these plants have been running below capacity, producing only 525,000 vehicles in 2024 compared to a combined capacity of around one million vehicles annually. This underutilization has led to shift cuts as part of Nissan's restructuring process.
Nissan's Search for a Strategic Partner
Nissan has been actively seeking a strategic partner in the tech industry, with Tesla and Apple considered ideal candidates, following the collapse of a proposed merger with Honda. The Japanese government is reportedly wary of Foxconn acquiring a significant stake in Nissan due to concerns about the Taiwanese company's close ties to China.
Honda Merger Collapsed Amid Egos and Hybrid Tech Disputes
The proposed merger between Nissan, Honda, and Mitsubishi spectacularly fell apart just months after a memorandum of understanding was signed in December 2024. Reports suggest Nissan was unhappy with Honda's request to become a subsidiary and bristled at being told to abandon its e-Power hybrid technology. Honda, in turn, was reportedly frustrated with the slow pace of Nissan's restructuring and the depth of its financial troubles.
Nissan Faces Financial Challenges
Following the collapse of the merger, Nissan announced significant cost-saving measures aimed at recovering 400 billion Yen ($4.14 billion) by the 2026 Japanese fiscal year. The company's operating profit slid from 478.4 billion Yen ($4.69 billion) in April-December 2023 to 64 billion Yen ($663 million) across the same period in 2024, while net income dropped by 320.2 billion Yen ($3.3 billion) to 5.1 billion Yen ($52.8 million).
Uchida's Position Under Scrutiny
The Financial Times has previously reported that Honda would still consider a merger with Nissan if its CEO, Makoto Uchida, were to resign. Uchida-san is reportedly facing pressure from his own board and partner Renault after the merger negotiations broke down. Uchida himself acknowledged the need to explore all options for Nissan's survival as a standalone company.
