Saudi Arabia has initiated preliminary discussions with U.S. electric vehicle manufacturer Tesla to explore the possibility of establishing a manufacturing facility within the kingdom, according to sources familiar with the matter, as reported by the Wall Street Journal. These talks coincide with other notable interactions involving Tesla, as Turkish President Tayyip Erdogan personally invited Tesla CEO Elon Musk to consider constructing a vehicle production plant in Turkey, as communicated by Turkey’s communications directorate.
Elon Musk, the visionary behind Tesla, is set to hold a meeting with Israeli Prime Minister Benjamin Netanyahu during his visit to California on Monday. These engagements underscore the growing interest of nations in securing deals with Tesla, a leading player in the electric vehicle industry.
Saudi Arabia, in its pursuit of diversifying its economy away from its heavy reliance on oil, has been actively courting Tesla. One intriguing offer on the table involves granting Tesla access to specific quantities of essential metals and minerals required for its electric vehicles. These resources would be sourced from countries such as the Democratic Republic of Congo, potentially ensuring a steady supply chain for Tesla’s manufacturing needs.
Notably, Saudi Arabia’s sovereign wealth fund holds a majority stake in Lucid Group, an electric vehicle startup poised to challenge Tesla’s dominance in the industry. This strategic investment highlights Saudi Arabia’s commitment to the electric vehicle sector’s growth.
Furthermore, one of the proposals being considered by Saudi Arabia involves extending financial support to commodities trader Trafigura for a struggling cobalt and copper project in the Congo. This project could serve as a critical source of vital materials for Tesla’s factory operations. Trafigura, in response to this proposal, has indicated that it is reviewing its options for the Mutoshi project in the Congo due to escalating costs and persistently low cobalt prices.
Tesla, as of the time of this report, has not issued an immediate response to requests for comment from Reuters. Similarly, Saudi Arabia’s sovereign fund, the Public Investment Fund, has declined to provide any official statement on the matter.
Elon Musk had previously stated in May that Tesla would likely select a location for a new manufacturing facility by the end of 2023. This move is in line with Tesla’s ambitious goal to increase its annual vehicle sales to 20 million units by the year 2030, a substantial leap from its 2022 figure of approximately 1.3 million vehicles. Tesla’s global expansion continues with the ongoing construction of its seventh factory in Mexico, situated in the northern Nuevo Leon state.