Chinese tech giant Tencent acquires a 5% stake in Tesla
30 March 2017
30 March 2017
Chinese tech giant Tencent Holdings has invested $1.78 billion (€1.67 billion) in Tesla, indicating it is confident in Tesla’s future as traditional brands plan major EV offensives around 2020. This equates to about 8.2 million shares and makes it Tesla’s fifth-largest shareholder.
Tesla already raised about $1.2 billion (€1.1 billion) by selling common shares and convertible debt earlier in March and this additional capital boost will assist Tesla with cash flow as it seeks to launch its new Model 3 later in 2017 and expand further into important overseas markets like China.
In a US regulatory filing from early March, Tesla reported making more than $1 billion (€929 million) in revenue in China in 2016, accounting for more than 15% of Tesla’s total revenues of over $7 billion (€6.5 billion).
China is the largest electric vehicle (EV) market in the world and CEO Elon Musk has said China will become Tesla’s largest market too.
Tencent has previously invested in Chinese EV manufacturing start-ups, including NextEV, which tests self-driving cars in California, home to Tesla. NextEV, based in Shanghai, has since rebranded itself as Nio and has also received investment from the Chinese search engine giant Baidu.
Tencent has also backed at least two other Chinese EV start-ups, including Future Mobility, which is working on autonomous EVs, like Nio, and aims to introduce the first one by 2020. Tencent has also invested in Didi Chuxing, the world’s second largest ride-hailing company after Uber, as well as Lyft, Uber’s main competitor in the US.
No plans have been announced as far as a possible technological collaboration between Tencent and Tesla is concerned but Andrea Ghizzoni, Tencent’s European director, said: ′The Tesla investment could help us create a connected car that can use third-party services in [Tencent’s instant messaging platform] WeChat, including calling contacts or paying for gas.’
Tesla CEO Elon Musk tweeted: ′Glad to have Tencent as an investor and advisor to Tesla.’
Photograph courtesy of iStock