Tencent has picked up a five percent stake in American electric car manufacturer Tesla as the Chinese internet giant steps up its investment in the electric car market industry. This marks Tencent's second straight investment in an electric car space after investing in start up firm Nio, previously known as NextEV Inc.       

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Tencent disclosed in its latest regulatory filing with the US Securities and Exchange Commission on Tuesday that it has bought approximately 8.2 million shares in Tesla, accounting for nearly 5 percent stake in the electric car company.

Tesla's founder Elon Musk also confirmed the stake sale through a tweet. "Glad to have Tencent as an investor and advisor to Tesla," he tweeted later in the evening. The investment makes Tencent the fifth largest shareholder in the American electric car manufacturer.  

With investment in Tesla, the Chinese internet major has consolidated investment in technologies that is rapidly shaping the global auto industry. It is already one of the biggest investors in ride-sharing Didi Chuxing and German mapmaker Here.

These investments compliment with the vision of Tencent Chairman Ma Huateng, who earlier this month, disclosed that his company plans to develop AI (Artificial Intelligence) technology for driverless cars in the future.          

Share prices of both Tesla and Tencent soared on Tuesday as the market gave a huge thumbs up to the reports of stake sale. Stocks of Tesla climbed 2.7 percent at NASDAQ to close at $277.45, while Tencent shares touched the highest intraday price since its June 2004.

Tesla has been on a roll over the years to emerge as one of the front players in the electric car industry. It made a spectacular turn around last year in the Chinese market, with the company claiming that its annual revenue in China crossing the $ 1 billion milestone.  

Mr Musk has made a bold prediction that China will soon become the second biggest market, after the United States.    

Tagschina, Tencent, Tesla, Tesla China, Elon Musk