Elon Musk has dismissed speculation about Tesla investing in Nissan after reports suggested Japanese leaders were pushing for the deal. Despite his denial, Nissan’s stock soared 9.5 per cent on hopes of a potential partnership.

The plan to approach Tesla comes after Nissan walked away from Honda’s $58bn merger proposal, spurring fears that Japan’s third-largest carmaker could fall into potentially hostile foreign hands, with Taiwanese iPhone assembler Foxconn, activists and private equity groups circling.

Nissan in recent weeks has been searching for a strategic partner in the tech industry, with some board members suggesting Tesla and Apple as ideal targets.

Former PM Yoshihide Suga is backing a plan for Tesla to invest in Nissan, led by ex-Tesla board member Hiro Izumi. The initiative arises after a failed $58 billion merger between Nissan and Honda, with Tesla aiming for strategic involvement in Nissan's US operations.

Elon Musk responded, "The Tesla factory IS the product. The Cybercab production line is like nothing else in the automotive industry."

A high-level Japanese group that includes a former prime minister has drawn up plans for Tesla to invest in Nissan after the collapse of its merger talks with Honda , the Financial Times said on Friday.

Elon Musk, CEO of Tesla, has denied rumors suggesting that Tesla might invest in the struggling Japanese automaker Nissan. This denial came after a report indicated that a Japanese group was seeking to attract investments into Nissan,