Elon Musk’s electric vehicle operation Tesla has secured $1.8bn after selling 5pc of its company to Chinese tech giant Tencent.
Tencent’s investment portfolio is bulging in 2017, with key interests in mapping and location software firm Here and US healthcare outfit Grail today supplemented by a more glamorous punt.
Purchasing 5pc of Tesla for $1.8bn, it seems that the company is getting in at one of the latest stages possible, with its cash injection likely to be put towards the carmaker’s first truly mainstream vehicle over the next 12 months.
In March last year, just 24 hours after announcing it, Tesla’s Model 3 (at $35,000) was taking orders ahead of a late 2017 release. The number of those putting down deposits exceeded 232,000 worldwide.
At $1,000 per deposit, the company raised almost $250,000 on the back of one statement, with many more orders following.
Now the race is on to get the vehicles ready for shipping – not an easy task due to the company’s relatively light footprint across global markets.
Tencent’s funding, so, could make matters a bit easier, especially given the cost of mass delivery when limited cash is coming in.
Founded in 1998 by Ma Huateng, Tencent is one of Asia’s largest tech companies, with a growing interest in automotive technology.
Perhaps best known for its WeChat mobile messaging app, the dominant communication tool in China, Tencent’s moves in recent years have made the company’s plans obvious.
Tencent was an early investor in NextEV, a Shanghai-based electric vehicle start-up now called Nio, based in the US.
Earlier this year, it invested in Here. Once owned by telecoms giant Nokia, Here was sold to a number of major German auto manufacturers back in 2015 for a sum of €2.5bn, as part of a future of connected cars and, more specifically, autonomous vehicles.
Since then, Tencent, NavInfo and GIC have purchased a 10pc stake in the company, with Intel soon joining the fold.