Shares of Nissan Motor Co. surged more than 12% after reports that a Japanese group, led by former Tesla board member Hiro Mizuno, is drawing up plans for Tesla to invest in Nissan.

The initiative is backed by former Prime Minister Yoshihide Suga and his former adviser, Hiroto Izumi.

The group believes Tesla is interested in acquiring Nissan’s US factories, boosting its domestic production amid trade tensions and threats of tariffs from Trump.

The proposed plan involves creating a joint venture with Tesla as the lead investor and possibly involving Hon Hai Precision Industry Co (aka Foxconn) as a minority shareholder to prevent a full takeover.

This development comes after merger talks between Nissan and Honda Motor Co. failed, which left Nissan in search of a strategic partner.