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China’s Tencent becomes 5th largest shareholder of Tesla

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Published: 10:10 GMT, Mar 31, 2017 |
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China’s Tencent Holdings has bought a 5-percent stake of the U.S. electric car maker Tesla Inco. for 1.78 billion U.S. dollars, the latest investment by a Chinese internet company in the potentially lucrative market for self-driving vehicles and related services.

The deal makes Tencent the fifth biggest shareholder of Tesla and expands the Chinese tech giant’s presence in an emerging investment sector that includes self-driving electric cars.

Tencent’s investment provides Tesla with additional cash cushion as the car maker prepares to launch its mass-market Model 3.

Tencent considers CEO Elon Musk a model entrepreneur and Tesla a global pioneer in such new technologies as electric, self-driving, shared vehicles as well as sustainable energy production. The company hopes to make the world a better place by encouraging internal innovation and providing financial support to emerging tech industries, the Chinese tech giant responded to the deal Tuesday.

Tesla’s revenue topped 1 billion U.S. dollars in China in 2016, more than double that in the previous year, making China its second largest market after the United States, the company’s latest financial report showed.