Nissan Motor (OTC:NSANY) shares surged 9.5% in Asian trading on Friday following reports that Tesla (NASDAQ:TSLA) may invest in the Japanese automaker. According to the Financial Times (FT), a high-profile Japanese group, including former Prime Minister Yoshihide Suga, is proposing a strategic partnership between Tesla and Nissan.

Key Highlights

• Tesla's Potential Investment: The proposal aims for Tesla to become a strategic investor in Nissan after the automaker's failed $58 billion merger talks with Honda (NYSE:HMC).
• U.S. Factory Expansion: Nissan's Tennessee and Mississippi plants, with a 1 million vehicle capacity but only 525,000 units produced in 2024, could help Tesla expand production amid U.S. tariff threats.
• Led by Prominent Figures: The initiative is reportedly spearheaded by Hiro Mizuno, a former Tesla board member, and backed by Suga and his former aide Hiroto Izumi.
• Countering Foreign Takeovers: Nissan's rejection of Honda's merger has raised concerns about potential acquisitions by foreign investors, including Taiwanese tech giant Foxconn (SS:601138).

Market Reaction

• Nissan stock closed at 458.80 JPY, its highest since early January, surging 9.5%.
• Honda shares also gained 1% in Tokyo trading.

Will Tesla Make a Move?

As of now, Tesla, Elon Musk, Nissan, and other parties have not officially confirmed any deal. However, a Tesla-Nissan partnership could significantly impact electric vehicle (EV) production and global auto manufacturing strategies.

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Conclusion

The potential Tesla-Nissan deal could reshape EV production, U.S. manufacturing, and global supply chains, but no official confirmation has been made yet. Investors should monitor further announcements and market trends closely.

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