What’s going on here?
After Honda ditched its rescue mission, Japanese carmaker Nissan was left on the shelf – but Tesla could ride in on a white, uh, Cybertruck to save the damsel in distress.
What does this mean?
Nissan’s running too many factories and selling too few cars. Desperate for a reset, the carmaker announced a restructuring plan in November, planning to cut 9,000 jobs and 20% of its production. But, unconvinced that the move would be enough, Moody’s still downgraded Nissan to a “junk” credit rating on Friday – essentially saying there’s a high risk that it falls behind on its debts.
Well, one carmaker’s trash is another’s treasure. An ex-Tesla board member is pushing the EV maker to invest in the struggling firm. See, Nissan’s US factories are running at half capacity – meaning there’s plenty of space to put Cybertrucks and self-driving vehicles together without building more infrastructure.
Why should I care?
For markets: Mars, space rockets, the White House, and… a struggling old carmaker.
Investors pushed Nissan’s stock up 9% after the news – but don’t bet on a fairytale ending. Tesla may be too busy with its own problems: sales fell last year for the first time in over a decade, it’s laying off more than 10% of its workforce, and the stock has held anything but steady. Plus, aiding an old-school carmaker isn’t exactly the sort of innovation-heavy moonshot that gets Elon Musk out of bed in the morning.
The bigger picture: There’s no relationship like a geopolitical one.
Nissan needs a hero, but the Japanese government has high standards for its darling carmaker. That’s why it’s been stand-offish with Foxconn – the Taiwanese electronics firm. Wary of its ties to China, the government would rather wait for another suitor to come around. And rather than emotional availability or good old-fashioned height, Japan will vet them based on geopolitical standings.
