Nissan Wants Tesla to Do What?

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In This Issue

• The Backstory

• Whiskey Tango Foxtrot?

• Possibility 1: Desperation

• Possibility 2: Securing Japan in New World Order

• Possibility 3: Just Generating Press

The Backstory

Earlier today there was reporting indicating that a high-level Japanese group — including a former Japanese prime minister — has drawn up plans for Tesla to invest in Nissan.

Excuse me, what?

So we all know that Honda and Nissan were supposed to get together. It was assumed that this merger was a push by the Japanese government to protect its industries and not suffer the embarrassment of potentially having a company go bankrupt. Nissan isn’t necessarily in dire straits, but it has seen better days.

That deal fell through as quickly as it was conceived. So now apparently some powers that be want Tesla to invest in Nissan. This makes absolutely no sense.

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Whiskey Tango Foxtrot?

Tesla makes electric vehicles. For the entire history of the company, it has made electric vehicles. At no point during this history did anyone expect Tesla to make anything other than electric vehicles. Even at the last earnings call, Tesla CEO Elon Musk stated that “EVs are inevitable.”

Nissan does make a couple of EVs, and there are some EVs in the pipeline, but it’s really hard to see what an investment in Nissan does for Tesla. Sure, we can all understand how it helps Nissan, but what’s in it for Tesla? I know Elon’s brain is mush these days thanks to the drugs, but I don’t think he’d go for this.

So let’s break down some of the reasons why this might be happening.

Possibility 1: Desperation

I’m not sure how much life Nissan has left in it. I’m sure Infiniti will go long before Nissan does, and the company does have some money it’s sitting on right now. So things aren’t bad. But if the going assumption in Japan right now is Nissan is not long for this world, the government might be trying to find someone… anyone… to save it.

Most of Tesla’s value is wrapped up in its stock valuation and not a Scrooge McDuck-style money bin full of cash and coins.

So there’d have to be some kind of fancy equity swap or some other exchange to keep the lights on. But Nissan’s valuation wouldn’t be at a fire sale level, and I can’t see Tesla wanting to get into that game.

If the company had some technology that Tesla would want — advanced solid-state, for example — it might change the equation some. But otherwise, this makes zero sense.

Also, to be fair, it’s the most plausible explanation.

Apparently, Apple is also a target, which would make a bit more sense. But if Apple didn’t want to get into the actual TV business, I can’t see it wanting to get into the car business.

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