Chinese Tech Titan Tencent Buys 5 Percent of Tesla for $1.8 Billion
Sadly for headline writers everywhere, Tencent did not buy 10 percent of Tesla.
Massive Chinese technology company Tencent has purchased a five percent share of Tesla for $1.78 billion, the automaker-slash-electric services company has revealed.
The move, which nets Tencent 8.2 million shares of Tesla, makes the Chinese tech giant the fifth-largest investor in the Silicon Valley EV company, after Elon Musk and a trio of investment firms based out of the U.S. and the U.K.
Tencent and Tesla's names were tied together in the news last fall, when a group of white-hat hackers affiliated with the Chinese tech company announced they'd found a way to wirelessly seize control of a Model S. The hackers brought their findings to Tesla to allow the carmaker to patch the vulnerability before going public.
Tencent, an online media and entertainment conglomerate that's one of the largest Internet companies on Earth, is no stranger to the burgeoning electric vehicle market. The company has invested in at least three EV companies, most notably NextEV—now known as Nio, and whose EP9 hypercar is the current electric vehicle lap record holder at the Nurburgring. The company has also invested in Lyft and Didi Chuxing, Uber's chief rivals in the ride-hailing arena.
The investment in Tesla means Tencent now holds a stake in at least five companies that are working on self-driving cars in one form or another.
The investment, revealed in regulatory paperwork and brought to light by Reuters, gives Tesla an additional cash cushion as it prepares to boost production in advance of the launch of the Model 3 later this year. The company also raised roughly $1.2 billion earlier in March by selling off a mix of convertible senior notes and common stock. (We don't understand the difference, but hey, that's why we write about cars instead of working on Wall Street.)