China's Tencent buys 5% stake in Tesla

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Chinese tech giant Tencent has spent $1.78bn (£1.4bn) on buying a 5% stake in electric carmaker Tesla.

Tencent, best known for its WeChat mobile app, has been investing in a number of sectors, including gaming, entertainment, cloud computing and online financing.

Tesla said the 5% stake was passive, meaning Tencent would not get a say in how the US firm was run.

Shares in Tesla rose 2.7% in pre-market trading following the announcement.

Tesla’s range of electric cars has included the Model S and the Roadster, which was billed as the world’s first electric sports car.

The company also specialises in battery storage, and, through its SolarCity subsidiary, residential solar panels.

The firm has been raising capital ahead of the launch of its mass-market Model 3 sedan, and gained about $1.2bn through a bond and share sale earlier in March.

Tesla has been loss-making for most of the last three years but its shares have gained more than 18% in the last 12 months.

The firm’s billionaire chief executive, Elon Musk, remains the largest shareholder, with a stake of about 21% as of the end of 2016.

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