There Are No Immediate Plans to Work Directly With Tesla, But May Happen in the Future, Tencent Says

Yicai

2017-03-29

(Yicai Global) March 29 -- After taking a 5 percent stake in Tesla Inc. [NASDAQ:TESLA], Tencent Holdings Ltd. [HKG:0700] said it has no specific cooperation plan right now, but the pair may look to work together in the future.

Tesla confirmed the transaction in a letter to the US Securities and Exchange Commission yesterday. The sale will make Tencent the new-energy automaker’s fifth largest shareholder. The USD1.8 billion purchase, at USD217.67 per share, was made on March 17 through Tesla’s private placement and public market acquisition, at about 16.7 percent discount.

Asked about why it invested in the firm, Tencent said Tesla’s Chief Executive Elon Musk is a model entrepreneur, and the company is a global leader in new technologies like new-energy cars, self-driving cars, car sharing and sustainable energy production. Tencent has also been promoting mutually beneficial development with other firms, and expects to make its own contributions toward building a better world, by encouraging innovation and funding emerging technological industries.

Regarding future cooperation between the two, Tencent said Tesla is committed to developing its Model 3 car, solar roofs and building its Gigafactory 1. There are no current plans to cooperate directly, it added, saying that as the two firms develop there may be opportunities to work together.

As a tech firm, Tencent has extensively planned to get into car making with its internet and artificial intelligence technologies. Chairman Pony Ma publicly said that global investors were focusing on AI and that Tencent should also value its development.

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