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Nissan Motor Co. shares jumped after the Financial Times reported that a high-level Japanese group has drawn up plans to seek investment from Elon Musk’s Tesla Inc. to aid the struggling carmaker.

The group believes the electric vehicle maker is interested in acquiring Nissan’s plants in the U.S., the newspaper reported, citing people it didn’t identify. The proposal envisions a consortium of investors, with Tesla as the largest backer, but also includes the possibility of a minority investment by Hon Hai Precision Industry Co. to prevent a full takeover by the Apple supplier, the report said.

Nissan’s shares jumped more than 12% on the news of the potential investment, before closing 9.5% higher in Tokyo.

Nissan has found itself in need of a lifeline once again after a deal with Honda Motor Co. to combine both brands under a single holding company formally ended earlier this month. While Nissan is now on the hunt for a new partner — CEO Makoto Uchida has said it would be difficult to survive without one — the idea of a tie up with Tesla was met with skepticism from industry watchers.

The Tesla factory IS the product.

The Cybercab production line is like nothing else in the automotive industry. — Elon Musk (@elonmusk)

That’s partly due to Tesla’s own struggles as EV demand slows: Last month it reported a drop in annual sales for the first time in more than a decade, and it has cut more than 10% of its workforce. But buying a stake in another carmaker would be a notable change from its usual investments, which focus on businesses that support its high-tech EV ambitions.

It’s also unclear which Nissan assets would be a draw. The automaker has three plants in the U.S. and has previously warned it may slow a planned ramp-up of EV production at its facility in Canton, Miss., due to uncertainties about energy and trade policies under Donald Trump’s presidency.

“For Tesla, it’s difficult to think there are any merits in buying Nissan,” said Yasuhiko Hirakawa, head of investment at Rakuten Investment Management Inc. “It obviously has no need for legacy assets like engines and assembly lines. It’s difficult to imagine something Tesla needs that Nissan can offer.”

The proposal is being led by Hiromichi Mizuno, former chief investment officer of the Japan’s Government Investment Fund, who was on Tesla’s board as an independent director from 2020 to 2023, the FT reported. The push is also said to be supported by ex-Prime Minister Yoshihide Suga, it said.

A Nissan spokesperson declined to comment on the report. Tesla didn’t immediately respond to an emailed request for comment. Mizuno and a representative for Hon Hai didn’t immediately respond. Suga’s office didn’t immediately respond to a request for comment.

Musk responded to the report on X, his social media platform, saying the “Cybercab production line is like nothing else in the automotive industry.”

The fallout of the scrapped deal with Honda has been especially pointed for Nissan, which has suffered from weak sales, overcapacity, an outdated lineup of unpopular models and revolving-door leadership since the 2018 ouster of Carlos Ghosn.

But despite Nissan’s challenges, its vast manufacturing operations and brand recognition are still enticing suitors.

Foxconn, as Hon Hai is more commonly known, has expressed renewed interest in Nissan after the deal with Honda collapsed, and Bloomberg News reported earlier this month that KKR & Co. is weighing an investment in Nissan.

The carmaker continues to face risks from its restructure as well as the challenging geopolitical landscape. Moody’s Ratings on Feb. 21 cut its credit rating to speculative-grade and maintained a negative rating outlook.

“Whoever the buyer is, Nissan’s restructuring is unavoidable,” said Rieko Otsuka, a strategist at MCP Asset Management Japan.