Tesla Opens Shop in Saudi Arabia, Signs of Mended Relations with Kingdom
[Riyadh] Tesla is opening up shop in Saudi Arabia in the latest sign Elon Musk has put to rest a once-bitter feud with one of the kingdom’s most powerful men.
A New Beginning
The company will showcase its model lineup, plus prototypes of its Cybercab and the humanoid robot Optimus, at a launch event on Thursday (Apr 10) in Riyadh. Tesla has offered little detail about its broader plans, but at least one showroom appears to be under development in the capital.
Mending Fences
Tesla’s entry into Saudi Arabia is a fresh signal Musk has mended relations with the kingdom after a spat with Yasir Al Rumayyan, head of the US$925 billion Public Investment Fund (PIF). The two had a falling out after Musk tweeted in August 2018 that he had “funding secured” to take Tesla private on the basis of preliminary talks he’d had with Al Rumayyan.
A New Market
For Saudi Arabia, welcoming a new US automaker could be seen as a further show of good faith towards Trump and his America First agenda. For Tesla, its entry is indicative of goodwill towards the Saudis and a signal that the company sees growth potential in the kingdom as it battles a brand crisis and sales slump elsewhere.
Competition and Challenges
Tesla will face competition in the Saudi market from Chinese carmakers, whose models are popular with locals, as well as Lucid, which opened a final-assembly plant in the kingdom in September 2023. The PIF is the Newark, California-based company’s top shareholder and just participated in a US$1 billion offering of convertible senior notes this month.
Conclusion
Tesla’s entry into the Saudi market is a significant development in the company’s global expansion plans. While the company faces competition from other automakers, its presence in the kingdom is expected to boost its growth prospects. The mending of relations between Musk and Al Rumayyan is also a positive sign for the company.
Frequently Asked Questions
Q: What is the significance of Tesla opening a shop in Saudi Arabia?
A: The move is seen as a sign of mended relations between Elon Musk and Yasir Al Rumayyan, head of the Public Investment Fund (PIF).
Q: What are the plans of Tesla in Saudi Arabia?
A: Tesla will showcase its model lineup, plus prototypes of its Cybercab and the humanoid robot Optimus, at a launch event on Thursday (Apr 10) in Riyadh. At least one showroom appears to be under development in the capital.
Q: How big is the electric vehicle market in Saudi Arabia?
A: Electric vehicle sales still account for just over 1 per cent of overall sales, according to PwC. While more than 40 per cent of Saudi consumers say they’d consider buying an electric car in the future, adoption will be challenged by affordability, limited infrastructure and risks related to high temperatures.
