The same Chinese company that bought League of Legends a couple of years ago just became one of Tesla’s largest shareholders. According to a Securities and Exchange Commission filing dated March 24th, Tencent Holdings Ltd. has purchased a five percent stake in the company—8,167,544 shares to be exact. According to TechCrunch, the deal was arranged a week earlier, and Tencent paid $1.7 billion for the shares.
Assuming Tesla gets that money (rather than Tencent having bought the shares in the open market), the cash infusion will no doubt be welcome. The company’s acquisition of Solar City came with a large amount of debt, and it continues to lose money selling Model S and Model X electric vehicles—its two profitable quarters have been thanks to the sale of emissions credits to other companies. But it has bulging order books for the Model 3, and it told investors in February that production for that car begins in July. Fulfilling those orders in a timely manner won’t be cheap, which is where Tencent’s $1.7 billion should come in handy.
There’s plenty of reason for skepticism over that target, though. The Model S and Model X both had plenty of teething troubles early on, and neither were built in numbers close to Tesla’s goals for the Model 3. Tesla is also forgoing the traditional production prototype, a “beta” version of a new car that companies use to refine the product and its production process. That’s a change of plan from last year, when the company told investors in a 10-K filing that a beta prototype Model 3 would be the company’s next performance milestone. Last week, Elon Musk tweeted a short video of a “release candidate” Model 3:
Musk also used Twitter to try to dispel any false expectations about the Model 3. If you were expecting all the bells and whistles from the Model S at less than half the price, be prepared to be disappointed:
Early production models will also have fewer options in order to minimize production hassles.
Finally, we’ve had the closest thing to official confirmation that a cheaper electric SUV—the so-called Model Y—is happening. We asked Musk (via Twitter direct message) whether there was any truth to recent rumors of the fourth model. The reply? An enigmatic “Next week.”
Update, 3/30 (2:30p CT): Ars followed up with Musk through Twitter for clarification. Musk said “next week” actually refers to incoming information about Neuralink, his recently revealed company aiming to link humans and computers. Information on the “Model Y” is not expected until 2018.