What The Hell America!

Tesla is finally set to debut in Saudi Arabia, years after a dramatic fallout between Riyadh and Elon Musk.

The electric vehicle company will open showrooms in Riyadh, Jeddah and Dammam on April 11, entering a market that’s undergoing an energy transition through the ambitious Vision 2030 plan, aimed at veering the economy away from oil.

The launch also marks yet another chapter in the complex relationship between Elon Musk and the kingdom, which led to Tesla expanding into every major country in the Middle East over the years, except Saudi Arabia.

Musk’s interactions with Saudi Arabia have reflected his often unpredictable and contradictory approach to business relationships — from considering taking Tesla private with Saudi funding to sparring on social media with the country’s officials. The relations warmed of late after Musk was given a key role in the Donald Trump administration to cut inefficiency and red tape.

Trump is reportedly planning to visit Saudi Arabia soon on his first foreign trip since returning to power, after requesting in January that the kingdom invest more than $1 trillion in the U.S. economy over four years, including military spending.

Tesla’s launch in Saudi Arabia comes at a time when the country has been increasingly investing in electric-vehicle technology, while global sales for Teslas have taken a beating.

Here’s how events unfolded for Tesla in Saudi Arabia:

July 2018 – Saudi Arabia’s sovereign wealth fund Public Investment Fund (PIF) buys almost 5% of Tesla, worth about $2 billion at the time. Musk reportedly meets PIF representatives and discusses taking Tesla private in a potential $72 billion buyout. 

August 2018 – Musk tweets about potentially taking Tesla private at $420 a share — a substantial premium to its trading price at the time — claiming “funding secured” and later revealing discussions with Saudi PIF. Tesla shares rally.

A later tweet from Musk indicates the funding wasn’t secure. Tesla’s stock crashes, and shareholders sue Musk, saying the shares wouldn’t have risen if he hadn’t tweeted he would repurchase the shares for $420 apiece.

September 2018 – The U.S. Securities and Exchange Commission accuses Musk of fraud and seeks his removal from Tesla. Meanwhile, after failing to secure definitive Saudi investment to privatize Tesla, Musk abandons the plan.

Saudi PIF announces its $1 billion investment in California-based EV maker Lucid Motors.

October 2018 – Musk settles with SEC over misleading tweets about Saudi funding, paying a $20 million fine and stepping down as Tesla chairman.

Jamal Khashoggi, a U.S.-based journalist and critic of the Saudi Arabian government, is killed in Istanbul. Saudi authorities claim he died during an unauthorized operation by agents tasked with convincing him to return to the country, while Turkish officials said these agents were acting under direct orders from the Saudi leadership.

November 2018 -Musk says he would probably not take Saudi funds after learning of Khashoggi’s death.

2019-2020 – Saudi PIF cuts Tesla stake in phases. By February 2020, it had sold 99.5% of the 8.2 million shares it held.

January 2023 – Musk’s legal team subpoenas the head of Saudi Arabia’s PIF, Yasir al-Rumayyan, to testify that the fund was indeed planning to take Tesla private in a case over Musk’s 2018 tweet. Al-Rumayyan refuses to testify.

September 2023 – A report in The Wall Street Journal says Tesla is in talks with Saudi Arabia to set up an EV factory in the country. Musk denies the report, calling it “yet another utterly false article.”

December 2023 – Musk and Saudi officials meet to discuss a potential manufacturing facility in the kingdom.

February 2024 – Saudi Arabia announces expanded EV incentives as part of its Vision 2030 plan, creating favorable conditions for Tesla’s entry.

March 2024 – Tesla announces plans to enter Saudi Arabia with its first showrooms and service centers.

October 2024 – Musk makes a surprise appearance at Riyadh’s Future Investment Initiative Summit via a video link, signaling mending of ties.

April 2025 – Official start of Tesla operations in Saudi Arabia with a flagship store opening in Riyadh.

Tesla will now join Lucid and China’s BYD, looking to expand a market where EVs make up just 1% of the total car sales.

Musk may have turned the corner with the authorities, but Saudi Arabia’s luxury market may pose challenges for Tesla, according to European electric mobility analyst Felix Hamer, who questions whether the brand offers sufficient luxury features to appeal to consumers in the kingdom.

“It’s questionable how much Tesla can deliver on people’s expectations,” Hamer told Rest of World. “Of course, their brand recognition will help establish a name quickly, but it’s debatable whether there is enough luxury on offer for such a market.”