Tesla enters Saudi Arabia as Musk's ties with kingdom improve
What's the story
Tesla has announced its expansion into the Saudi Arabian market, a major milestone for the American electric vehicle (EV) manufacturer.
The move comes as CEO Elon Musk's relationship with the kingdom appears to be improving.
Notably, the development is particularly significant since Tesla already operates in other Middle Eastern nations but has yet to establish a presence in Saudi Arabia, the largest market in the Gulf region.
Historical context
Musk's 2018 tweet sparked controversy and legal issues
The latest expansion into Saudi Arabia is a major move for Tesla, especially since Musk's 2018 tweet about having "secured funding" to take the company private after meeting with the Public Investment Fund (PIF), Saudi Arabia's sovereign wealth fund, had sparked a controversy.
The botched bid had resulted in a lawsuit from investors and exposed tense exchanges between Musk and Yasir al-Rumayyan, head of PIF.
Despite the past tensions, relations seem to have improved lately.
Launch details
Launch event in Riyadh on April 10
Tesla's launch event is set for April 10 in Riyadh, where the company will display its EVs and solar energy products.
The next day, Tesla will open pop-up stores in three major cities: Riyadh, Jeddah, and Dammam.
The invitations for the launch event had even asked guests to mention their preferred Tesla car model.
More details on Tesla's Saudi Arabia plans are expected in the coming weeks.
Market analysis
Saudi Arabia's EV market and Tesla's challenges
Despite its global reputation, Tesla will have to deal with major challenges in Saudi Arabia's nascent EV market.
Only 1% of all car sales in the kingdom were electric vehicles in 2024, according to a report by PwC. Competitors like BYD and Lucid Motors have already made their presence felt here.
Plus, large gas-guzzling vehicles continue to dominate due to cheap fuel prices and limited EV charging infrastructure across the country.