Nissan

Nissan’s latest desperate gamble—see if Tesla will buy the company

Senior politicians in Japan are not going to let Nissan die easily. The automaker has been struggling for some time now, with an outdated product portfolio, ongoing quarterly losses, and soon, the closure of factories and thousands of layoffs. The Japanese government has been trying to find a suitor and had hoped that Honda would do its patriotic duty and save its rival from extinction.

That deal—one branded “a desperate move” by former Nissan CEO and fugitive from Japanese justice Carlos Ghosn—fell apart last week after Renault demanded a price premium for its shares in Nissan, and Nissan demanded a merger of equals with Honda. In reality, it was always going to be a takeover, with very little in it for Honda in the way of complimentary product lines or access to new technologies.

Today, we learned of yet another desperate move—the former Japanese Prime Minister Yoshihide Suga is among a group that is trying to get Tesla to invest in Nissan instead.

Such a merger seems exceedingly far from likely, even if Tesla CEO Elon Musk wasn’t completely distracted dismantling the federal government and its workforce. While the company still maintains a ludicrous market capitalization thanks to retail investors who believe it is poised to sell billions of humanoid robots to every human on earth, as an automaker, it may well be struggling almost as much as Nissan.

As experts told us last year, Tesla is not a well-run enterprise. Its product range suffers, like Nissan’s, from being outdated compared to the competition. It appears that consumers have turned against the brand in Europe and increasingly the US, and its quarterly financial results have been more than disappointing of late. Tesla’s free cash flow fell by 18 percent in 2024 to $3.6 billion, although such is the value of Tesla stock that, were a Tesla-Nissan deal to happen, the former could pay for the latter with equity, should it entertain the idea seriously.

Honda and Nissan to merge, Honda will take the lead

Cars, honda, Nissan / 9u50fv / December 23, 2024

In 2019, then-head of the alliance Carlos Ghosn was arrested by Japanese police on charges of financial misconduct. After three months under house arrest, Ghosn fled the country and Japan’s criminal justice system, which rarely returns a not guilty verdict.

What about Renault, Mitsubishi?

Last year, Nissan agreed to invest $663 million into Renault’s EV activities; at the same time Renault gave up the majority of its shares in Nissan, reducing the stake of each company owned by the other, down to 15 percent. That was meant to lead to “a broader range of EV products and powertrains,” said Uchida at the time. But evidently it was decided that this arrangement was not sufficient to improve Nissan’s electric vehicle portfolio.

For its part, Mitsubishi says it will monitor the situation and decide whether or not to join at a later date. Meanwhile Renault said in a statement that “as the main shareholder of Nissan, Renault Group will consider all options based on the best interest of the Group and its stakeholders. Renault Group continues to execute its strategy and to roll-out projects that create value for the Group, including projects already launched within the Alliance.”

Assuming nothing throws a spanner in these particular works, the deal will be finalized by next June, with the new holding company for the two OEMs created by August 2026. Honda will take the lead of the new enterprise, in large part thanks to its larger market capitalization. But Mibe said that any real payoff from the merger wouldn’t be realized until after 2030. The hope is that shared development costs and greater purchasing scale will help drive down costs, but both companies will continue existing partnerships such as that between Honda-GM as well.

We can expect more shared vehicle platforms between Honda and Nissan, as well as deeper cooperation at the R&D stage. But there are also plans to optimize manufacturing, including facilities, as well as integrating supply chains and even sales financing to find cost savings and efficiencies.

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