
Tencent buys 5% of Tesla - jhartmann
https://techcrunch.com/2017/03/28/tesla-tencent-investment/
======
dmix
Tesla recently announced they are ramping up their Model 3 production even
more than what some people thought was already optimistic numbers:
[https://www.bloomberg.com/news/articles/2017-03-27/tesla-
mod...](https://www.bloomberg.com/news/articles/2017-03-27/tesla-model-3-ramp-
up-aims-to-crush-bmw-and-mercedes)

> For Musk to hit all of his targets, Tesla would need to build about 430,000
> Model 3s by the end of next year. That’s more than all of the electric cars
> sold planet-wide last year.

> Even if half of the Model 3 inventory shipped to other countries, 2 U.S.
> sales under Musk’s targets would outpace the BMW 3 Series and the Mercedes C
> class—combined.

> To sell that many $35,000 sedans in the U.S. “would be absolutely
> unprecedented based on what we know about car markets today and how people
> spend their dollars,” said Salim Morsy, electric car analyst at Bloomberg
> New Energy Finance. “It could happen. I’m pretty sure it won’t.”

If they could pull this off this might be a great investment by Tencent.

It's also great for the car industry and environment as well. Especially
considering their work on automated driving. If they get that many cars on the
road it would give them a ton of data and a big advantage/lead in AI over
other companies. But it could also be setting the bar too high and setting
them up for failure (even though they might otherwise have nailed targets).

Regardless, as a design fan it would be interesting to see so many Teslas on
the road. They are great looking cars.

~~~
forgotpwtomain
> environment as well

It's not going to do anything great for the environment and we've been over
this on previous Tesla threads (years ago). Driving electric cars instead of
hybrids in areas where the electricity is primarily derived from unclean
sources is _not_ better than hybrids for the environment.

~~~
smilekzs
Unclean power plants are still vastly more efficient than the most efficient
internal combustion engines. That's why trains are electric wherever possible.

[https://en.wikipedia.org/wiki/Electric_locomotive](https://en.wikipedia.org/wiki/Electric_locomotive)

~~~
wott
> Unclean power plants are still vastly more efficient than the most efficient
> internal combustion engines.

I don't think so.

> That's why trains are electric wherever possible.

1\. Thing is, you don't have to refuel electric locomotives, so that saves
time and logistics. Unless you plan to install a pantograph on the roof of
your Tesla, you still have to refuel it.

2\. Unlike cars, diesel locomotives do not use any kind of direct transmission
anyway, they generate electricity from Diesel engines to power electric
motors. Because unlike cars, they have to transmit huge power and torque to
make the first wheels turns, and mechanical transmissions are not good for
that, but electric engines are. So since they use electric engines anyway, why
not power them from electrical energy instead of diesel? That's why
locomotives are electrical wherever possible.

~~~
Coincoin
You don't think so? Is that your opinion or a fact?

Most calculations I've seen seem to conclude electric are more CO2 efficient
per mile; from 2 to 9 times depending on which state is producing the power.

------
jpeg_hero
Tesla shorts can't get a break. First a smooth $1B+ capital raise without a
stock hiccup and now this.

~~~
laurent123456
I didn't short the stock but I can understand why someone would.

They are expected to generate over 90% of their value after 2020 [0]. There's
the expectation that Elon Musk will definitely deliver, that Tesla market
share will not be eaten up by other carmakers when they seriously start
releasing electric vehicles. The expectation that electric and not another
form of energy, such as hydrogen, will dominate, etc.

There's a lot that could go wrong and a lot of unknown variables. Then again
everything might turn out fine, the point is that no-one know for sure.

[0]
[https://webcache.googleusercontent.com/search?q=cache:UBQtFu...](https://webcache.googleusercontent.com/search?q=cache:UBQtFuwrjtEJ:www.economist.com/news/business/21717421-three-
financial-sanity-tests-whether-there-bubble-are-technology-firms-
madly+&cd=9&hl=en&ct=clnk&gl=us)

~~~
spyspy
> when they seriously start releasing electric vehicles

They've been "serious" for a long time. Chevy has been selling the Volt since
2010. If they were going to muscle out Tesla they would have done it by now.
And it's not just about technology. Tesla has the customer reputation that
companies like GM will never have again.

~~~
Robotbeat
I own a Volt. Best car I've ever driven. GM doesn't care much for it. The only
advertising they really do for it basically is trying to steal EV customers
from Nissan's Leaf. Really dumb. And the dealers don't like it because 1) they
don't know how to service them and especially 2) they almost never need
servicing. If you run almost exclusively on electric, you only need like 4-5
oil changes in the entire life of the car. And the brakes last forever, too.

~~~
michel-slm
I'm on a work visa here in the US, and I couldn't get financing on a Volt
because GM Financial insisted on doing > 30 months lease on their hybrid cars
(and my work visa expires before then, though it's likely to be renewed
anyway).

Go figure. It's not like I can't afford the monthly payments.

~~~
chiph
Did you talk to an independent leasing company? You don't have to lease via
the automaker.

[http://www.marketwatch.com/story/the-greatest-auto-lease-
dea...](http://www.marketwatch.com/story/the-greatest-auto-lease-deal-ever-in-
two-simple-steps)

~~~
michel-slm
Will bear that in mind for next time, thanks! My other consideration is I am
still trying to build a credit history, and don't really want more hard hits
on my file than necessary...

------
11thEarlOfMar
I see this move as a blessing for Tesla to gain market share in China. The
stock is valued for growth far into the future, and achieving that outcome is
really iffy without a robust China market.

[edit] I'm speculating, but I don't think TenCent could have gotten as big as
it has without the blessing of the Chinese government. That is the basis for
my view.

~~~
devy
> I see this move as a blessing for Tesla to gain market share in China.

Yes, and Tencent is betting on it, since Tesla Chinese market sales has just
broken $1B [1], soon Chinese market will be Tesla's biggest market with
Chinese government's policy leaning on supporting EV industries in a MAJOR
way. Win-win!

[http://fortune.com/2017/03/03/tesla-one-billion-sales-
china/](http://fortune.com/2017/03/03/tesla-one-billion-sales-china/)

------
smaili
> Tencent is a prolific investor. It holds equity in Snap, this year’s hot
> tech IPO, among others following an early investment. While that interest in
> messaging makes sense since Tencent’s operates China’s dominant chat app —
> WeChat — it isn’t immediately clear whether the Tesla investment has
> strategic undertones.

This was my immediate question as well. Is this purely an investment for its
portfolio or is there a strategic element as well? I imagine being able to
send/receive messags on WeChat as the beginning of something more.

~~~
ihsw2
Having access to the internals at Tesla is interesting and potentially
powerful -- significant ownership share brings many benefits that are by no
means small. Albeit on a need-to-know basis and through a peephole, it is
nonetheless advantageous.

It may cost $1.7B but it guarantees continued access, whereas throwing
technical exfiltration (ie: hacking) and manual exfiltration (ie: mole in
Tesla staff) whose resources are limited and unpredictable.

It's also a good financial investment.

~~~
erikpukinskis
Can you explain what kind of access you mean? I thought preferential
information sharing with specific investors violated SEC rules?

~~~
chillydawg
not if they have board seats

~~~
mtgx
Yes, that's the real question. If Tencent obtained a board seat as well, then
I could think of all sorts of scenarios that could benefit Tencent in China,
but not necessarily Tesla.

------
woodandsteel
I suppose the administration is going to argue this move supports Trump's
claim that global climate change is a Chinese plot to undermine the American
economy.

------
vit05
Is this showing that they haven´t found a Chinese company that could compete
against tesla? China is investing a lot in Solar energy, batteries and have
car companies that want to become global players, and most of Tencent
investments are on Chinese companies that make products focused on China and
Asian markets. I do not know if they buying in open market tells more about
Tesla potential or about China future in cars and energy.

[https://www.crunchbase.com/organization/tencent#/entity](https://www.crunchbase.com/organization/tencent#/entity)

~~~
shawn-furyan
A $2B investment doesn't really preclude other similar future plays for a
$200B company. So I think there's not enough information to draw that sort of
conclusion.

------
umeshunni
Worth noting that Tencent is also an investor in Future mobility which has
been remarkably quiet since their funding announcement last year:
[https://www.crunchbase.com/organization/future-
mobility#/ent...](https://www.crunchbase.com/organization/future-
mobility#/entity)

------
bigiain
When I first read this, my head saw "Fifty Cent"...

And I thought "A _rapper_ has just bought $1.7billion worth of Tesla
shares???" and was all ready to make "Has Tesla already become the Cristal
Champagne of car brands?" gags...

Still, half a billion return in two weeks on a 1.7 billion play is pretty nice
money...

~~~
elgenie
Fifty Cent got a minority stake in Glaceau instead of a payment for endorsing
their Vitamin Water. When Glaceau sold to Coca-Cola, that equity was worth
somewhere in the neighborhood of $100 million.

~~~
broodbucket
Pretty sure 50 is bankrupt now.

~~~
reanim8ed
> Pretty sure 50 is bankrupt now.

It was fake: [http://www.dailymail.co.uk/news/article-3470122/He-s-far-
bro...](http://www.dailymail.co.uk/news/article-3470122/He-s-far-broke-
Bankrupt-50-Cent-64-MILLION-assets-10-million-checking-stocks-
earning-184-000-month.html)

------
turingbook
Smart move. Tencent's investing but not controlling strategy make it good
supporter of the new generation of ambitious entrepreneurs against AAAAF(Apple
Alphabet Amazon Alibaba Facebook): \- JD \- Didi \- Snap \- Meituan-Dianping
……

~~~
bpicolo
> but not controlling strategy

I mean, they bought all of league of legends. Their primary driver is most
likely "let's make money".

~~~
turingbook
Games are Tencent's backyard and cash cow.

~~~
epynonymous
not entirely true, i imagine wechat is a huge advertising platform for the as
well.

------
Kiro
Tencent's reach is mind-boggling:
[https://en.wikipedia.org/wiki/Tencent#Investments](https://en.wikipedia.org/wiki/Tencent#Investments)

------
intrasight
Funny. Just yesterday I commented on an HN thread that my first electric car
would likely be Chinese, but that it might have the "Tesla" name on it.

------
andy_ppp
The Model 3 will come with full automation and an Uber competitor. Just a
guess why they are so confident about hitting their numbers.

------
Markoff
this just shows how distrustful are Chinese about their own currency that they
seek any way to store money abroad in safe harbor away from RMB and Chinese
government

------
BlytheSchuma
Now I can get free legendary skins with purchase of a model 3? What time to be
alive.

------
icantdrive55
I think they knew solar is the future, all around the world.

China has massive pollution, and most homes/businesses that have access to
direct sunlight. (Yes--I know solar works 50% on cloudy day. It doesn't work
well with a lot foliage coverage. China looks barren of trees--sadly.)

My hope is those solar tiles come down drastically in price. My hope is the
average roof will be cost effective to put said tiles up.

I think those solar tiles will be Tesla's Trump card. It will probally be in
four years, or more in the United States. We will need a new president. (I was
for Trump putting Coal miners back to work, until I found out the problem is
not regulations, but automation. Actually, I want clean air. We need a better
way of supporting people affected by the elimination of old ways of doing
things; like a Basic Income.). Sorry about being all over the place, but there
are no simple answers. Trump is just finding this out.

I think Tencent saw a long value in the stock, even though their citizens will
not likely buy Tesla's tiles. They will buy the cheapest knock-off as usual,
but the rest of the civilized world will buy Tesla's product.

(I don't know what patents are on these new Tesla tiles, but I bet they are
seen as a valuable commodity, even to a cheating society like China.)

------
camflan
They should've bought 10%...or change their name to Fivecent

~~~
Le_SDT
I think puns in the comment section belong to reddit

~~~
hyperbovine
What, we can't have puns now? Lighten up.

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Digit-Al
Shouldn't they have bought ten(per)cent?

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txmx2000
I only need Twocent to know this is a bad idea.

~~~
Markoff
still better and less risky than keeping money in free falling RMB

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matthewhall
I have a bad feeling about this...

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ge96
I thought I saw TenCent's name in Kong Skull Island

~~~
ge96
Ahh I guess they're not connected tencent pictures and tencent

