Chinese internet giant Tencent has bought a 5% stake in US electric car maker Tesla, in just the latest high-profile investment from a Chinese company in the race to capitalize on the potentially extremely profitable self-driving and electric car market.
With its $1.78 billion investment, Tencent now becomes the US automaker’s 5th largest shareholder, owning about 8.2 million shares. The deep-pocketed Chinese company will help Tesla handle expenses for its Model 3 rollout later this year, along with presumably helping to open some doors for expansion back in China.
While Tesla started slowly in China (something that Elon Musk doesn’t like to talk about), the company has been growing recently, tripling its revenue in the country last year. Currently, Tesla has 24 stores in mainland China, along with 114 supercharging stations and 348 regular charging stations. Major investment from China’s most valuable company will likely help to further accelerate the company’s growth in the world’s largest auto market. In a tweet Musk said he was glad to have Tencent as not only an investor, but also as an “advisor.”
Tencent is embroiled in an expensive investment war with other Chinese internet giants Baidu and Alibaba, all trying to set themselves up to profit greatly from the cars of tomorrow by backing start-up companies developing self-driving and electric vehicles. Thanks to the country’s pervasive pollution problems, interest in electric cars has taken off in China, and Tencent hopes to secure its place in that brighter, greener future.
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