Invesing.com - Tesla (NASDAQ:TSLA) Inc. is on track to close nearly 3% higher on Tuesday, after the California-based electric carmaker, said Chinese giant Tencent acquired a 5% stake for $1.78 billion.
Shares of Tesla rose more than 3% to $280.68 on Tuesday, just shy of its 52-week high of $287.39, as Tencent’s 5% stake in Tesla, valued at $1.78 billion, provided the company with a much needed injection of cash ahead of its plan to boost production volume and launch the Model 3.
After, the release of its fourth quarter results in February, Elon musk informed investors that the company did not yet need to raise capital to finish its Model 3 production but warned that not doing so would bring the company “closer to the edge”, which was “probably not the best thing or shareholders."
Tesla’s plan to launch Model 3 Sedan, which is priced at around $35,000, represents a significant opportunity to carve out a larger share of the automotive market, as its cars have traditionally served the luxury niche of the market.
Meanwhile, Chinese giant Tencent’s investment in Tesla, strengthens the Shenzhen-based company’s presence in the self-driving electric vehicle market, after it made a string of investments in U.S. and Chinese startup companies focused on developing self-driving electric vehicles.
Tesla share price trade at $277.75, up 2.79% by 15:16 EDT.