Tesla shareholder Tencent backs Elon Musk despite Twitter distraction

Tesla will “keep blowing our minds” with technology even while CEO Elon Musk is distracted with Twitter, according to the executive to who led an investment from Chinese technology giant Tencent into the U.S. electric carmaker.

Tencent, known as one of the world’s largest gaming and social media firms, invested in Tesla in 2017, taking a 5% stake for around $1.78 billion.

“We saw a huge potential in the company, the category of EVs (electric vehicles) but also a huge amount of respect for the way Elon was driving the company,” David Wallerstein, chief “eXploration” officer (CXO) at Tencent, told CNBC in an interview on Thursday.

As CXO, Wallerstein has the task of investing in emerging technology for Tencent.

He said that when Tencent made the investment, “it wasn’t so clear that they were going to survive and that EVs were going to actually survive.”

Since then, Tesla has become one of the world’s largest electric carmakers. It delivered 1.31 million cars in 2022.

But last year, Musk purchased Twitter, a move investors saw as a big distraction for the billionaire at a time when Tesla needed a steady hand. Tesla stock is down about 62% over the last year.

Wallerstein said that despite the distraction, he is still has confidence in Tesla.

“Certainly, if a leader is get distracted across many companies it’s hard to focus and Elon has a lot of projects. I think they’re still doing great work,” Wallerstein said.

He added that there’s likely to be several competitors but that will “be really good for the planet” as electric car sales rise.

“I would count on them [Tesla] to keep blowing our minds with what they do with technology,” Wallerstein said.

Tencent is a prolific investor in many different industries, ranging from gaming to e-commerce. But the company recently sold some of its stake amid a stricter regulatory environment in China.

But Wallerstein is on the hunt for investments in next-generation areas that could aid the fight against global challenges like climate change. Tencent has invested in companies such as Chinese electric vehicle Nio and German “flying” car company Lilium.