Just got an electric tankless water heater. It's rated at 40 amps requiring 8 gauge wire. Can I use the existing 10/2 30amp circuit for this installation?

Absolutely not!

10/2 is not listed for 40 amps. It is listed for 30 amps.

If you put a 40 amp breaker on a 30 amp conductor, then please put your local fire department on a retainer. You will be calling them soon. For 40 amp, you are required to use a #8 (stranded) cable.

Is there any requirement for the heater to use 120VAC? If there is, then you must use a 8/3 cable instead of an 8/2.

Just got an electric tankless water heater. It's rated at 40 amps requiring 8 gauge wire. Can I use the existing 10/2 30amp circuit for this installation?Isn't this question self-answering??

Good catch Stan.