Nissan's Deepening Liquidity and Investor Sentiment Crisis: A Tectonic Shift in Institutional Confidence

In the shadow of a global automotive industry racing toward electrification and software-defined vehicles, Nissan Motor Co., Ltd. (7201.T) finds itself at a crossroads. The company's recent financial performance—marked by a ¥79.1 billion operating loss in Q2 2025 and a net loss of ¥115.8 billion—has triggered a seismic shift in institutional investor sentiment. While some heavyweights like BlackRock and The Vanguard Group have doubled down on their stakes, others, including State Street Corporation, have quietly divested. These divergent moves reveal a fractured market perception of Nissan's Re:Nissan turnaround plan, raising critical questions for both short- and long-term investors.

The Institutional Exodus: A Canary in the Coal Mine

Institutional ownership of Nissan has become a barometer of confidence—or the lack thereof. BlackRock, Inc. increased its stake by 2.0% in Q2 2025, bringing its total ownership to 7.0%, a vote of confidence in Nissan's aggressive cost-cutting and electrification ambitions. Similarly, The Vanguard Group added 2.1% to its holdings, reinforcing its 8.29% stake. These moves suggest that some institutional investors see value in Nissan's low P/E ratio of 5.2x and its potential to emerge from restructuring as a leaner, more agile competitor.

However, the story is not uniformly optimistic. State Street Corporation reduced its stake by 1.0%, while Vanguard had previously trimmed its position by 0.5% in early 2025. These divestments, though modest in scale, signal a recalibration of risk. Institutional investors are increasingly wary of Nissan's reliance on unproven cost-saving measures—such as supply chain consolidation—and its exposure to U.S. import tariffs, which could cost the company $3 billion annually. The divestments also reflect skepticism about Nissan's ability to compete with Chinese EV giants like BYD and Tesla, which are outpacing it in innovation and market share.

The Re:Nissan Plan: A Double-Edged Sword

Nissan's restructuring strategy, dubbed Re:Nissan, is both a lifeline and a gamble. The plan includes closing seven of its 17 global plants, cutting 20,000 jobs (15% of its workforce), and reducing annual production capacity from 3.5 million to 2.5 million vehicles. These measures aim to achieve ¥500 billion in savings by 2027, with 20% of those funds allocated to electrification and R&D. While the cost-cutting is necessary, the execution risks alienating stakeholders. For instance, the closure of the Oppama plant—a historic symbol of Nissan's engineering prowess—has drawn criticism for prioritizing short-term austerity over long-term innovation.

The company's liquidity position, though robust (¥3.1 trillion in net cash and ¥3.4 trillion in total available funds), is a double-edged sword. While it provides a buffer for restructuring, it also raises questions about capital allocation. With ¥200 billion in savings projected by 2027, Nissan must balance austerity with investment in EVs and software-defined vehicles. The recent termination of its joint venture MOU with Honda—a partnership that could have shared R&D costs—further underscores the company's isolation in a consolidating industry.

Investor Sentiment: A Tale of Two Time Horizons

For short-term investors, Nissan's stock has shown resilience. Following the announcement of its restructuring plan, shares surged 5.5%, buoyed by the market's appetite for risk-on assets in a low-interest-rate environment. However, this optimism is fragile. The lack of a full-year earnings forecast and the looming threat of U.S. tariffs create a volatile backdrop. Institutional divestments, particularly by risk-averse funds like State Street, could exacerbate short-term volatility, especially if the company misses key cost-cutting milestones.

Long-term investors face a more complex calculus. Nissan's “Nissan Ambition 2030” plan—targeting 40% EV sales by 2025—remains ambitious, but the company's current pace lags behind competitors. The Ariya's modest 43.6% sales growth in Q2 2025, compared to Tesla's Model Y's dominance in the U.S. market, highlights the gap. For long-term bets to pay off, Nissan must not only execute its cost-cutting but also accelerate innovation in battery technology and autonomous driving.

The Road Ahead: Strategic Recommendations

For investors, the key lies in balancing caution with opportunity. Short-term players should monitor Nissan's ability to meet its ¥500 billion savings target and navigate U.S. trade policies. A could provide insights into market sensitivity. Long-term investors, meanwhile, should assess the company's EV pipeline and partnerships, such as its renewed collaboration with Renault and Mitsubishi.

Institutional divestments are not a death knell for Nissan but a warning shot. The company's survival hinges on proving that its Re:Nissan plan is more than a cost-cutting exercise—it must be a catalyst for reinvention. Until then, the automaker remains a high-risk, high-reward proposition, with its fate tied to the execution of a plan that could either restore its glory or cement its decline.

In the end, Nissan's story is a microcosm of the automotive industry's broader transformation. For investors, the lesson is clear: in a world where legacy meets disruption, the difference between salvation and obsolescence lies in the courage to pivot—and the discipline to follow through.