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A high-level Japanese group that includes a former prime minister has drawn up plans for Elon Musk’s Tesla to invest in the struggling carmaker Nissan, following the collapse of its merger talks with rival Honda.
The new proposal, led by former Tesla board member Hiro Mizuno, is being supported by ex-premier Yoshihide Suga and his former aide Hiroto Izumi, according to three people with direct knowledge of the move. Several board members at Nissan are aware of the initiative.
The group is hopeful Tesla will become a strategic investor since they believe the world’s largest pure electric-vehicle maker is keen to acquire Nissan’s plants in the US, according to the people. The factories would help it boost domestic manufacturing in response to Donald Trump’s tariff threats.
The plan to approach Tesla comes after Nissan walked away from Honda’s $58bn merger proposal, spurring fears that Japan’s third-largest carmaker could fall into potentially hostile foreign hands, with Taiwanese iPhone assembler Foxconn, activists and private equity groups circling.
Talks with Honda were originally triggered after Foxconn approached Nissan’s partner Renault last year about buying some of the French company’s stake in the Japanese carmaker. Following the breakdown in negotiations this month, Foxconn confirmed its interest in acquiring Nissan shares as a means to expand its EV manufacturing business.
Suga, who stood down as prime minister in 2021, is still an active figure in Japanese politics, continuing as a member of Japan’s lower house. He started his political career in Yokohama, where Nissan is based.
The proposal envisions a consortium of investors, with Tesla as the largest backer, but also includes the possibility of a minority investment by Foxconn to prevent a full takeover by the Apple supplier.
Nissan shares rose as much as 11 per cent in Tokyo on Friday after the Financial Times reported the plans.
Nissan and Izumi declined to comment. Mizuno, Suga, Tesla, and Musk did not immediately respond to requests for comment.
In recent weeks, Nissan had begun its own search for a strategic partner in the tech industry, with some board members suggesting Tesla and Apple as ideal targets, according to two other people familiar with the matter. In November, it launched an emergency turnaround plan that included 9,000 job losses as it fell to a quarterly loss.
With a market capitalisation of $1.1tn, Tesla is among the world’s most valuable companies. Historically, it has not invested in car companies and Musk is pivoting the company’s focus and spending of its $36bn in cash to autonomous driving and robotics.
But it also wants to boost production in the US to offset the impact of President Donald Trump’s threatened tariffs. The group assembles all of its vehicles sold in the US locally but sources some of its components from Mexico and other parts of the world.
Nissan has two assembly plants in Tennessee and Mississippi with a combined annual capacity of about 1mn vehicles but only produced 525,000 units there in 2024. As part of its restructuring, the company has announced plans to cut production capacity by 20 per cent globally to address flagging sales. Last week, it said it planned to cut shifts at the two US plants.
Nissan may not easily accept a sale of the US plants to a rival, given the local market is a key growth area for profits.
Since Foxconn’s interest in Nissan came to light in recent months, officials at Japan’s Ministry of Economy, Trade and Industry have been deeply concerned about the political implications and robustness of its national security screening process to handle Foxconn, which is seen as too close to China.
Blocking the deal would have been hard to justify since Japan has welcomed major semiconductor investment from Taiwan and previously allowed Renault to take a stake in Nissan and Foxconn to buy Sharp, according to Japanese government officials.
Following a restructuring of its alliance in 2023, Renault wants to sell a large chunk of the 36 per cent it still owns in the Japanese group at a high premium.
In an interview on Thursday, its chief executive Luca de Meo said any proposal needed to reflect the value created through the 25-year-old partnership.
“I just hope that the Nissan management team finds a way to make it work better than it has worked so far,” he said. “I give them all the support that they will need.”
Additional reporting by Stephen Morris in San Francisco, Joe Miller in Washington and Ian Johnston in Paris
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