American Century Investments, a New York City-based investment company, has announced it is investing $2 billion in Tesla Motors Inc. and other solar carmakers.
The investment follows an investment in the solar-power firm SolarCity Corp. by the California Public Utilities Commission, which has also given the green light to Tesla’s expansion in the U.S. The company has been selling battery storage for more than a year.
American Century is investing in the companies because they “are among the largest and most innovative, and have the potential to drive economic development in our communities,” said Andrew Whelan, a vice president of global communications and marketing for American Century.
“As we grow in this space, our customers will benefit from our innovative technology and our innovative approach to managing and managing power costs.”
The company’s investment comes after Tesla announced last week it had secured $2.8 billion in financing from a number of investors, including Goldman Sachs Group Inc., Deutsche Bank AG, Credit Suisse Group AG, Citigroup Inc. , Goldman Sachs, Bank of America Corp., Barclays Capital LLC and Morgan Stanley.
Tesla said it expects to receive up to $1.4 billion in total funding for the next few years.
The new funding is based on the company’s growth in battery storage, as well as the expansion of its SolarCity operations.
The funding will be used to develop and manufacture a new battery pack, which is being designed by Tesla to have the capacity to power the Model 3.
The battery pack will be built in China and shipped to the U, and the solar installer will receive a cut of the cost of the batteries.
The solar installer’s solar lease on the battery pack was valued at $5.3 billion in March, according to the California-based SolarCity, which also is looking to invest in electric vehicle companies.
Tesla CEO Elon Musk has said he plans to spend up to 20% of his fortune on the project, and he has been a vocal supporter of the solar industry.
“Solar is the next big thing,” Musk said at the SolarCity launch in October.
“I don’t see how we are going to be able to grow without it.”
American Century, which was founded in 2010 and has more than $7 billion in assets under management, is one of the biggest institutional investors in the industry.
American is an American institution, founded in 1917, that has investments across a broad range of sectors, including government and non-profit organizations, consumer discretionary goods, healthcare, financial services and technology.