Japan Attempts to Entice Tesla for Nissan Investment in Exchange for US Factories

A high-level Japanese group, spearheaded by former prime minister Yoshihide Suga and ex-Tesla board member Hiro Mizuno, is planning to approach Elon Musk with a proposal for Tesla to invest in struggling automaker Nissan.

The plan, which also includes former Nissan aide Hiroto Izumi, seeks to secure Tesla as a strategic investor in exchange for US manufacturing facilities owned by Nissan.

The initiative follows the collapse of Nissan’s merger talks with Honda, which ended in early February due to a breakdown in negotiations. The group leading the effort believes Tesla may be interested in acquiring Nissan’s underperforming plants in Tennessee and Mississippi to help boost its domestic manufacturing in the US amidst concerns over potential tariff threats from the US government. These plants have been operating below capacity, with Nissan struggling financially and in need of a turnaround.

The proposal also considers the possibility of Foxconn, a major Taiwanese tech company, providing a minority investment to prevent a full takeover by Tesla or Foxconn. Foxconn has expressed interest in acquiring Nissan shares as part of its push into the electric vehicle market, creating further uncertainty about Nissan’s future.

Despite some board members at Nissan being aware of the initiative, the company has declined to comment publicly on the matter. Mizuno, Suga, and Tesla have also not responded to inquiries regarding the proposal. However, the report of this potential investment sent Nissan’s stock price soaring by 12%, signaling market optimism about the future of the automaker.

This development comes on the heels of Nissan’s announcement that it will reduce production capacity by 20% globally and cut 9,000 jobs as part of an urgent restructuring plan. Nissan has faced significant challenges, including leadership turnover, underperforming models, and an outdated lineup, resulting in plummeting profitability. Many see Tesla’s involvement as a potential lifeline for the carmaker, though the exact details of any investment remain unclear.

Musk’s response to the proposal has been somewhat dismissive. On his social media platform, X (formerly Twitter), Musk stated that “the Tesla factory IS the product” and highlighted Tesla’s focus on its own production processes, casting doubt on the attractiveness of acquiring an existing carmaker’s plants. However, Tesla’s interest in increasing US production to address tariff concerns remains a key point of interest for the group advocating the investment.

As Japan considers the broader implications of a possible foreign investment, officials have expressed concerns about the national security implications of Foxconn’s involvement, given its close ties to China. Additionally, with the dissolution of the Honda merger and the heightened interest in Nissan from other technology companies, such as Apple and Huawei, the future of Japan’s third-largest carmaker remains uncertain.

Bloomberg, the Financial Times, Forbes, and the Guardian contributed to this report.