China's Tencent Holdings buys a 5 percent stake in U.S. electric car maker Tesla for $1.78 billion, the latest investment by a Chinese internet company in the potentially lucrative market for self-driving vehicles and related services.
For Tesla's Elon Musk, it could be the extra X factor.... Tencent's 1.8 billion dollar investment a massive cash boost. That puts the US carmaker at the cutting edge. Of China's drive into hi-tech motoring - in the biggest car market in the world. SOUNDBITE (English) JAMES HUGHES, CHIEF MARKET ANALYST, GKFX, SAYING: "This seems like a massive deal, it is a massive deal, it's a lot of money being invested here. But it also shows China being at the front edge of technology, at the front edge of any kind of technological improvement." And it's timely. As a 275 billion dollar tech giant, Tencent is adding to stakes it already has in Chinese electric vehicle companies. But for Tesla, the extra cash is a welcome cushion just as it pushes out its new mass market Model 3. Opening up China as a market to sell - and possibly build - cars. SOUNDBITE (English) JAMES HUGHES, CHIEF MARKET ANALYST, GKFX, SAYING: "With Tesla spending so much money, really pushing themselves forward, for it to have a tie-up like this with a Chinese firm is invaluable. I think there's more upside for Tesla to be perfectly honest." News of the five per cent stake drove shares up - pushing Tesla - at 45 billion dollars - just one billion shy of Ford's market cap. And adding even more value to Musk's own 21 per cent personal stake in the company.