Tencent buys 5 percent stake in Tesla
Chinese Internet company Tencent has bought a 5 percent stake in Tesla the U.S. based electric car maker. Tencent bought the five percent stake in Tesla for $1.78 billion. This is one of the newer investments done by a Chinese internet company into the market of self-driving vehicles.
Tesla Inc. needed an investment for some time due to the upcoming launch of its new Model 3 electric car in the mass market. This investment was revealed by a U.S. regulatory filing. This is a beneficial investment for both the companies as they needed money for the launch of the new Model 3. And Tencent can sell and make these cars in China for cheap. Which will be a revenue boost for the U.S. based electric car company as China is the world's largest auto market.
@business Glad to have Tencent as an investor and advisor to Tesla
— Elon Musk (@elonmusk) March 28, 2017
The Model 3 is going to go on sale later this year in the United States, and rest of the world afterward. Elon Musk also tweeted that they had seen very few orders for the Model 3 from China.
These new electric vehicle companies, which show huge potential to create good revenue streams in the auto sector. They have attracted huge investments from Chinese Internet giants like Tencent, Alibaba Group, and Baidu.
Tencent now owns around 8.2 million shares of Tesla Inc. Tencent has become their fifth largest shareholder.