Nissan continues to seek an investor after its merger talks with Honda hit a dead end, and that could end up being Tesla if Japanese leaders get their way.
The Financial Times reported on Friday that a group of Japanese business leaders, including former Japanese Prime Minister Yoshihide Suga and ex-Tesla board member Hiro Mizuno, was planning to approach Tesla with a view to convincing the EV electric car giant invest in Nissan.
Although Nissan has declined to officially comment on the move, the US newspaper cited three people with direct knowledge of the move.
"The group is hopeful Tesla will become a strategic investor since they believe (it) is keen to acquire Nissan's plants in the United States”, the Financial Times reported.
A tie-up with Elon Musk's Tesla EV brand would give a much-needed boost to Nissan’s electric car programme, and news of the approach sent Nissan shares surging by 11 percent on Friday, AFP reported.
Nissan was a pioneer in the electric vehicle (EV) game, but it has since fallen behind industry leaders and the failed merger with Honda was part of an attempt to play catch-up with the likes of Tesla and new Chinese players such as BYD.
Nissan does have an innovative hybrid system called e-power, in which the wheels are powered directly by electric motors, fed by a petrol motor generator, but Honda reportedly wanted to replace this with its own conventional hybrid technology. It is believed this was one of the sticking points in the proposed merger, along with Honda also wanting to make Nissan a subsidiary.
All of this takes place as embattled Nissan attempts a major restructure, which will see it reduce global production capacity by 20% and lay off tens of thousands of workers.
Moody’s downgraded Nissan’s credit rating to junk status on Friday morning, due to its weak profitability as demand slows for its ageing model portfolio, AFP reported.
The Japanese carmaker is currently anticipating an annual loss of over $500 million (R9.1 billion).
"Even if the company successfully executes its restructuring plan with cost reductions and new model releases, we do not expect free cash flow to turn positive until fiscal 2026 at the earliest," Moody's said.
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