The Chinese internet giant bought 5% of Tesla’s shares for about US$1.7 billion, making it one of the electric car company’s biggest shareholders.
The deal gives Shenzhen-based Tencent a growing presence in the rapidly expanding future mobility sector, with investments in US and Chinese startup companies that provide ride-sharing services and are developing self-driving electric vehicles.
Tesla CEO Elon Musk tweeted: “Glad to have Tencent as an investor and adviser to Tesla.” Musk did not say what he meant by “adviser” but in a separate tweet he noted Tesla had “very few” Model 3 orders from China, where the car has not been formally introduced.
The influx of cash comes at a good time for Tesla, as it prepares to ramp up production of its mass-market Model 3.
In addition, Tencent has invested in Uber, Lyft, Snapchat, and Didi Chuxing. The Chinese tech giant is now Tesla’s fifth-largest shareholder, after Elon Musk and the investment firms Fidelity, Baillie Gifford, and T. Rowe Price.
Tesla, meanwhile, saw its Chinese sales triple last year to over US$1 billion, or more than 15% of its total revenue.