Constellation Research founder and chairman Ray Wang says a potential investment from Tesla Inc (NASDAQ: TSLA) in Japan’s Nissan Motor Co Ltd (TYO: 7201) would be a “brilliant move”.
His remarks arrive shortly after reports that a powerful Japanese group is seeking a Tesla investment in Nissan after the latter failed to negotiate a merger with Honda.
Neither Nissan nor Tesla has officially commented on the Financial Times report.
Billionaire Elon Musk, however, did hint on X that he’s not interested in any such team-up with Nissan.
The fake news strikes again
Shares of the EV behemoth ended roughly flat in the wake of speculation on Monday.
Why would Tesla want to invest in Nissan?
The high-level Japanese group reportedly expects billionaire Elon Musk to be interested in acquiring Nissan’s production facilities in the United States.
If Tesla were indeed to invest in Nissan, it could tap into those factories to increase its manufacturing capacity and lower costs, which may come in handy as the EV maker’s vehicle business returns to growth in 2025.
Additionally, the Japanese automaker has a strong footprint in several markets, including Japan and other Asian countries.
By investing in Nissan, Tesla could accelerate its growth in these markets.
“I think it’s actually going to be a very smart move getting around the Trump tariffs,” Wang said in a CNBC interview on Monday.
Versus its year-to-date high, Tesla stock is down more than 20% at writing.
What a Tesla investment may mean for Nissan
If Tesla agrees to be a strategic investor in Nissan, it would particularly be game-changing for the Japanese automaker.
Why? Because it needs help moving into EV markets and getting into EV areas, according to the principal analyst at the Silicon Valley-based Constellation Research.
Plus, combining their expertise in the automotive industry and battery technology could help Tesla and Nissan go up more fiercely against the Chinese EV makers that are rolling out new models priced at an exceptionally low $10,000 only.
“You can’t continue in that market without scale. So, if this is about a scale play, it makes a lot of sense,” Ray Wang added in the CNBC interview this week.
Nissan shares rallied about 10% on the FT report.
Is Tesla stock worth owning in 2025?
The Nissan news arrives only days after analysts at Wolfe Research dubbed Tesla one of the best stocks to short after the company saw its net income tank 71% on a year-over-year basis in Q4.
Wolfe sees TSLA as overvalued with several headwinds ahead, including increased competition from Chinese rivals and doubts about the viability of its self-driving technology.
Note that Tesla Inc missed Street estimates on both top as well as the bottom line in its fiscal fourth quarter.
Meanwhile, the EV stock does not pay a dividend either to make it any more rewarding to own it amidst the potential headwinds.
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