Musk denies Tesla investing in Nissan

TOKYO: Shares of Nissan Motor Co. plunged as much as 10%, the most in three weeks, after Tesla Inc. Chief Executive Officer Elon Musk dismissed a report that he was interested in investing in the ailing carmaker.

Nissan's stock jumped 9.5% on Friday after a Financial Times report that a high-level Japanese group was planning to seek investment from Tesla, on the belief it was interested in the automaker's US plants.

Musk later deflected the report in several posts on social media platform X, saying it was "fake news" and that Tesla's "Cybercab production line is like nothing else in the automotive industry."

Former Tesla board member Hiromichi Mizuno also denied he was involved in any plans to secure Tesla investment for Nissan in an X post on Friday evening.

The FT report said that Mizuno was leading the proposal. His X post also denied any knowledge of moves by the Japanese government to get Tesla to invest in Nissan.

Nissan shares tend to drop when speculation over investments retreat, as that means the automaker will have to find or create a new framework, said Yugo Tsuboi, chief strategist at Daiwa Securities Group Inc. Investors had already been "questioning the feasibility" of Tesla's investment, he said.

Nissan's shares have been volatile since it announced it was in talks with Honda Motor Co. over a potential tie-up in December, then dropped those talks this month.

Taiwan's Hon Hai Precision Industry Co. has publicly expressed interest in investing in the struggling carmaker, and US-based private equity fund KKR & Co. is also weighing a potential investment, Bloomberg reported earlier in February.

Hon Hai, also known as Foxconn, had proposed forming a four-way partnership with Honda, Nissan and Mitsubishi Motors Corp., Nikkei newspaper reported on Friday, but a Honda executive later denied any such plans, according to Nikkan Jidosha.

"With Honda or Hon Hai, I think there's a possibility of synergy with Nissan," said Tatsuo Yoshida, a senior analyst at Bloomberg Intelligence.

For Tesla, however, while there may be synergy in areas like EV development, its production and sales systems are so different from Nissan's that it would be a less effective partner, Yoshida said.