Chinese internet giant Tencent buys 5pc stake in Tesla for US$1.8b

Chinese internet giant Tencent Holdings has thrust itself onto the front lines of building the car of the future, with its acquisition of a 5 per cent stake in US electric carmaker Tesla for US$1.8 billion.

Tencent had accumulated about 8.2 million shares of Tesla from the California-based company’s registered offering on March 17 and through open market purchases, according to the carmaker’s filing to the US Securities and Exchange Commission on Tuesday.

That has made the Chinese company the fifth-largest shareholder in Tesla, according to data from Bloomberg.

“Tesla is a global pioneer at the forefront of new technologies including electric vehicles, assisted driving, shared vehicles, digitising real world information, sustainable energy generation and scalable energy storage,” said a Tencent spokesperson on the rationale behind its major investment in the company controlled by billionaire chief executive Elon Musk.

Tesla is one of only nine US-listed companies with annual revenue of more than US$5 billion that are expected to organically grow at about 20 per cent for the next two years, according to Bernstein Research. The firm is valued at US$45 billion, which rivals that of General Motors at US$52 billion, Ford at US$46 billion and BMW at US$54 billion.