Tesla will begin sales in Saudi Arabia next month, the electric carmaker announced on its website, indicating that CEO Elon Musk and the kingdom have reconciled following a rift stemming from Musk’s brief 2018 attempt to take the company private. Tesla operates in other Middle Eastern countries, but not in Saudi Arabia, the region’s largest market.
The dispute originated from Musk’s 2018 tweet claiming he had “funding secured” to privatize Tesla after meeting with Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF). This tweet led to investor lawsuits when the bid failed, revealing tense text exchanges between Musk and PIF head Yasir al-Rumayyan.
Tensions have eased since Musk’s involvement in Donald Trump’s presidential campaign and subsequent administration. Trump recently announced plans to visit Saudi Arabia, following his January request for the kingdom to invest over $1 trillion in the U.S. economy over four years, including military purchases.
Tesla’s launch event in Riyadh, scheduled for April 10, will showcase its EVs and solar-powered products. “Experience the future of autonomous driving with Cybercab, and meet Optimus, our humanoid robot, as we showcase what’s next in AI and robotics,” the announcement stated.
On April 11, Tesla will open pop-up stores in Riyadh, Jeddah, and Dammam, with further details on its Saudi Arabian plans, including investments planned for 2025 and beyond, to be announced in the coming weeks. Event invitations requested attendees to specify their preferred Tesla model.
This launch occurs amid declining Tesla EV sales in Europe, attributed to Musk’s support for far-right politicians, and protests in the U.S. over his involvement in federal government cuts. In Saudi Arabia, EV sales remain slow, accounting for only 1% of total car sales according to a 2024 PwC report. Chinese EV giant BYD and PIF-backed Lucid already operate in the Saudi market.
Following the public dispute with Musk, PIF invested over $1 billion in Lucid, becoming its majority shareholder. The $925 billion PIF has also invested in Ceer, a domestic EV brand yet to launch. However, large gas-guzzling vehicles remain prevalent in Saudi Arabia, where fuel is inexpensive and EV charging infrastructure is limited, hindering long-distance EV travel.
Relations between Musk and Saudi Arabia have improved, with Musk appearing alongside Rumayyan and Trump at a UFC event in New York in November. Musk also made a surprise video appearance at Riyadh’s Future Investment Initiative summit.
A U.S. jury cleared Musk of misleading investors in 2023 regarding his “funding secured” tweet. Musk testified that PIF sought to privatize Tesla, and tense text messages between him and Rumayyan were revealed during the trial. “You are throwing me under the bus,” Musk texted Rumayyan, according to court documents. Tesla’s European sales have declined by 42.6% this year, despite rising EV demand. Activists in the U.S. have staged “Tesla Takedown” demonstrations protesting Musk’s role in government efficiency cuts.
