Tencent Holdings, a Chinese technology giant, has bought a 5 percent stake in Tesla for $1.78 billion.

Tencent now owns 8.2 million shares in Tesla, the carmaker said, making it one of the biggest shareholders. Elon Musk is Tesla's top shareholder, with a stake of about 21 percent.

Musk, meanwhile, has been trying to raise capital ahead of the launch of the Model 3 sedan this year.

Tesla's shares were up nearly 2 percent at $275.60 in premarket trading on Tuesday. Chinese firms are investing in electric vehicles as they face tighter emissions rules in the pollution-blighted country.

Several Chinese EV start-ups, such as LeSee, NextEV, and Qiantu Motor, are backed by big internet groups such as Alibaba and Tencent. Future Mobility, an automotive venture backed by Tencent, aims to launch an electric self-driving car before 2020.

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