Unlock the Editor’s Digest free of charge
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.
A high-level Japanese group that features a former prime minister has drawn up plans for Elon Musk’s Tesla to put money into the struggling carmaker Nissan, following the collapse of its merger talks with rival Honda.
The brand new proposal, led by former Tesla board member Hiro Mizuno, is being supported by ex-premier Yoshihide Suga and his former aide Hiroto Izumi, in line with three individuals with direct information of the transfer. A number of board members at Nissan are conscious of the initiative.
The group is hopeful Tesla will change into a strategic investor since they consider the world’s largest pure electrical car maker is eager to accumulate Nissan’s vegetation within the US, in line with the individuals. The factories would assist it enhance home manufacturing in response to Donald Trump’s tariff threats.
The plan to method Tesla comes after Nissan walked away from Honda’s $58bn merger proposal, spurring fears that Japan’s third-largest carmaker might fall into probably hostile overseas arms, with Taiwanese iPhone assembler Foxconn, activists and personal fairness teams circling the group.
Talks with Honda have been initially triggered after Foxconn approached Nissan’s associate Renault final yr about shopping for a few of its stake within the Japanese carmaker. Following the breakdown in negotiations this month, Foxconn confirmed its curiosity in buying Nissan shares as a method to increase its EV manufacturing enterprise.
Suga, who stood down as prime minister in 2021, continues to be an lively determine in Japanese politics, persevering with as a member of Japan’s decrease home. He began his political profession in Yokohama, the place Nissan relies.
The proposal envisions a consortium of buyers, with Tesla as the biggest backer, but additionally contains the potential for a minority funding by Foxconn to stop a full takeover by the Apple provider.
Nissan and Izumi declined to remark. Mizuno, Suga, Tesla, and Musk didn’t instantly reply to a request for remark.
In latest weeks, Nissan had begun its personal seek for a strategic associate within the tech business, with some board members suggesting Tesla and Apple as preferrred targets, in line with two different individuals conversant in the matter. In November, it launched an emergency turnaround plan that included 9,000 job losses because it fell to a quarterly loss.
With a market capitalisation of about $1.1tn, Tesla is among the many Most worthy firms on the planet. Traditionally, it has not invested in automobile firms and Musk is pivoting the corporate’s focus and spending of its $36bn in money to autonomous driving and robotics.
However it additionally needs to spice up manufacturing within the US to offset the influence of US president Donald Trump’s threatened tariffs. The group assembles all its automobiles offered within the US regionally however sources a few of its elements from Mexico and different components of the world.
Nissan has two meeting vegetation in Tennessee and Mississippi with a mixed annual capability of round 1mn automobiles, however solely produced 525,000 models there in 2024. As a part of its restructuring, the corporate has introduced plans to chop manufacturing capability by 20 per cent globally to deal with flagging gross sales. Final week, it stated it plans to chop shifts on the two US vegetation.
Nissan could not simply settle for a sale of the US vegetation to a rival, given the native market is a key progress space for its gross sales and income.
Since Foxconn’s curiosity in Nissan got here to mild in latest months, officers at Japan’s Ministry of Economic system, Commerce and Business have been deeply involved in regards to the political implications and robustness of its nationwide safety screening course of to deal with Foxconn, which is seen as too near China.
Blocking the deal would have been onerous to justify as Japan welcomes main semiconductor funding from Taiwan, and beforehand allowed Renault to take a stake in Nissan and Foxconn to purchase Sharp, in line with Japanese authorities officers.
Following a restructuring of its alliance in 2023, Renault needs to promote a big chunk of the 36 per cent it nonetheless owns within the Japanese group at a excessive premium.
In an interview on Thursday, its chief govt Luca de Meo stated any proposal wanted to mirror the worth created via the 25-year-old partnership.
“I simply hope that the Nissan administration staff finds a technique to make it work higher than it has labored thus far,” he stated. “I give all of them the help that they’ll want.”
Further reporting by Stephen Morris in San Francisco, Joe Miller in Washington and Ian Johnston in Paris
