China's Tencent Takes 5% Stake in Electric-car Maker Tesla

[Shotgunner51]

China's Tencent takes 5 percent stake in electric-car maker Tesla
Tue Mar 28, 2017 | 10:50am EDT

Tesla Inc (TSLA.O), the California-based electric carmaker, said Chinese tech giant Tencent Holdings Ltd (0700.HK) acquired a 5 percent stake for $1.78 billion.

The purchase, revealed in a U.S. regulatory filing, pushed Tesla's stock higher in early trading, making it the second most valuable U.S. auto company ahead of Ford Motor Co (F.N) but behind General Motors Co (GM.N).

The deal gives Shenzhen-based Tencent a growing presence in the rapidly expanding future mobility sector, with investments in U.S. and Chinese startup companies that provide ride sharing services and are developing self-driving electric vehicles.

Tencent's investment also provides Tesla with an additional cash cushion as it prepares to boost production volume and launch its new Model 3. Tesla's shares were up 2.6 percent at $277.19 in early trading.

Founded in 1998 by entrepreneur Ma Huateng, Tencent is one of Asia's largest tech companies, best known for its WeChat mobile messaging app. With a market capitalization of about $275 billion, it is roughly six times the size of Tesla, whose $46-billion market cap on Tuesday topped that of 114-year-old Ford.

Tencent and fellow Chinese tech giants Alibaba Group Holding Ltd (BABA.N) and Baidu Inc (BIDU.O) have invested billions in mobility startups. The services being developed by those newcomers promise to transform the global transportation landscape while providing significant new revenue streams to providers of mobile services.

Tencent was an early investor in NextEV, a Shanghai-based electric vehicle startup which since has rebranded itself as Nio and whose U.S. headquarters in San Jose is not far from Tesla's Palo Alto base. Tencent also has funded at least two other Chinese EV startups, including Future Mobility in Shenzhen.

In addition, Tencent has invested in Didi Chuxing, the world's second-largest ride services company behind Uber, and in Lyft, Uber's chief U.S. rival.

Baidu has invested in Nio, as well as in Uber and Velodyne, a California maker of lidar sensors for self-driving cars. Alibaba's mobility investments include Didi and Lyft.

As Tesla is doing, many of the mobility startup companies backed by Tencent, Baidu and Alibaba are developing self-driving systems that eventually could be introduced in commercial ride sharing fleets in the U.S. and China after 2020.

Tencent maintains a U.S. office in Palo Alto, in the heart of California's Silicon Valley. Beijing-based Baidu and Hangzhou-based Alibaba also maintain offices in Silicon Valley.

Tencent owns about 8.2 million shares in Tesla, the carmaker said. Tencent is now the fifth-largest shareholder in Tesla, behind Elon Musk and investment companies Fidelity, Baillie Gifford and T. Rowe Price.(bit.ly/2nvNeMI)

Elon Musk-led Tesla raised about $1.2 billion by selling common shares and convertible debt earlier this month.

Musk is Tesla's top shareholder, with a stake of about 21 percent as of Dec. 31.

(Reporting by Rishika Sadam in Bengaluru, Sijia Jiang in Hong Kong and Paul Lienert in Detroit; Editing by Nick Zieminski)

http://www.reuters.com/article/us-tesla-stake-tencent-holdings-idUSKBN16Z1FJ

 

[Shotgunner51]

NextEV (Nio), Future Mobility, Didi Chuxing, Lyft and now also investing in Tesla, Tencent is slightly ahead of their rivals (Baidu, Alibaba) in building support for self-driving business.

 

[I S I]

Tesla is awesome.

 

[TaiShang]

NextEV (Nio), Future Mobility, Didi Chuxing, Lyft and now also investing in Tesla, Tencent is slightly ahead of their rivals (Baidu, Alibaba) in building support for self-driving business.

Baidu is also interested in auto tech, I think mostly software.

I read recently that they are cooperating with Changan on their latest SUV CS95 for intelligent driving.

Changan CS95 has a smart assistant that can communicate and do lots of things upon voice instruction. They call her 小安。

Amazing.

 

[Jlaw]

Money down the drain. Tesla not making money now or near future. Its survival depend on the model 3. The company's valuation is similar to so many bankrupt tech companies from the 90s.

 

[TaiShang]

Money down the drain. Tesla not making money now or near future. Its survival depend on the model 3. The company's valuation is similar to so many bankrupt tech companies from the 90s.

Usually, even if the company goes down the drain, the investors win. It is small stockholders that suffer most.

 

[terranMarine]

https://www.wsj.com/articles/elon-m...k-to-connect-brains-with-computers-1490642652

lets wait and see how this will turn out

 

[qwerrty]

Baidu is also interested in auto tech, I think mostly software.

I read recently that they are cooperating with Changan on their latest SUV CS95 for intelligent driving.

Changan CS95 has a smart assistant that can communicate and do lots of things upon voice instruction. They call her 小安。

Amazing.

NextEV to receive $600m from Baidu-led investment
By Mick Chan / 29 March 2017
https://paultan.org/2017/03/29/nextev-to-receive-600m-from-baidu-led-investment/

 

[TaiShang]

Very good. Perhaps giants like Tencent, Baidu, Alibaba had better start to organize like Chaebol/Keiretsu.

Interesting to watch how corporate China progresses.

***

This is the model Baidu is working with Changan:

 

[Jlaw]

Very good. Perhaps giants like Tencent, Baidu, Alibaba had better start to organize like Chaebol/Keiretsu.

Interesting to watch how corporate China progresses.

***

This is the model Baidu is working with Changan:

View attachment 387368

Chinese like to compete with one another. This mentally need to change.

 

[Beast]

Chinese like to compete with one another. This mentally need to change.

No、just like the warring state times. Technology and innovation progress rapidly.

 

[ahojunk]

Chinese like to compete with one another. This mentally need to change.

No、just like the warring state times. Technology and innovation progress rapidly.

I am against monopoly by a single company or entity.
With competition, comes progress and innovation. The consumer get better products, faster.
And better value for money.

With monopoly, only lawyers thrive.
With competition, engineers/builders/entrepreneurs thrive.

Very happy to see Tesla and the Chinese companies continually competing to get the best electric car to the market.

 

[Shotgunner51]

Chaebol/Keiretsu

Interesting that you mentioned this.

Yes I believe one or two generations down the road similar thing may happen in China as well, since the common cultural characteristic here is Collectivism (集体主义). Historically this had existed in Anhui (徽商), Shanxi (晋商), eastern Guangdong (潮汕商), nowadays probable regions would be where capital aggregate, say Shanghai, Hong Kong, Taiwan, Beijing, Zhejiang, Jiangsu and Guangdong.

But unlike in Korea/Japan where Chaebol/Keiretsu dictate national economy, banks and politics, in China the primary force will still be SOE, especially state-owned financial institutions. Given huge market size within China as well as in globalization, there's room for private capital groups to exist, blossom and become an auxillary force to SOE.

 

[TaiShang]

Interesting that you mentioned this.

Yes I believe one or two generations down the road similar thing may happen in China as well, since the common cultural characteristic here is Collectivism (集体主义). Historically this had existed in Anhui (徽商), Shanxi (晋商), eastern Guangdong (潮汕商), nowadays probable regions would be where capital aggregate, say Shanghai, Hong Kong, Taiwan, Beijing, Zhejiang, Jiangsu and Guangdong.

But unlike in Korea/Japan where Chaebol/Keiretsu dictate national economy, banks and politics, in China the primary force will still be SOE, especially state-owned financial institutions. Given huge market size within China as well as in globalization, there's room for private capital groups to exist, blossom and become an auxillary force to SOE.

Definitely agree. I would be little vary of a Korean-Japanese style conglomerate-building in which the boundaries between state/bureaucracy and private capital are blurred.

I guess Mainland China has strong constitutional-statutory checks against such development.

I would, however, be in support of such conglomeration of corporate China for international competitiveness and monopolistic status.

I guess, corporate China, especially those 90s and millennial generations, as you point out, will gradually move to that direction.