Tesla Sells A Chunk Of Itself To The Chinese For Almost $2 Billion

Industry News

Here's how both parties will benefit.

It should come as no surprise that investors throughout the world are interested in what Tesla Inc. has to offer. As for Tesla, it’s in need of cash as it prepares to launch its new Model 3. It’s now being reported that Chinese tech company Tencent Holdings has acquired a 5 percent stake of Tesla for $1.78 billion, according to US regulatory filing. All told, Tencent now owns 8.2 million shares of Tesla, and with it is now one of the company's biggest shareholders.

Tencent will specifically benefit from the deal by gaining a much larger presence in the mobility business, and it already has investments in other US and Chinese startups that deal in self-driving cars and ride sharing. As we’ve been reporting, Tesla has now entered the final testing phase for the Model 3, which is due to begin production this July. More than 300,000 people have put down deposits for one of the $35,000 (base price, before tax credits) EVs, and Tesla needs that cash to meet those production needs if it wants to make the deadline. Earlier this month, Tesla raised roughly $1.2 billion when it sold common shares.

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The new deal with Tencent, however, clearly puts Tesla in a more comfortable position going forward. Interestingly, Tencent previously invested in Future Mobility, which is planning to launch its own EV self-driving car by 2020.

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