Musk Mends Fences with Saudi Arabia Ahead of Tesla Launch

Elon Musk has reconciled with Saudi Arabia, marked by Tesla’s launch event scheduled in Riyadh, showcasing innovations including electric vehicles and AI. Despite facing sharp sales declines in Europe and minimal EV adoption in Saudi Arabia, the kingdom’s investments in the EV sector hint at potential growth. Past conflicts with the Saudi Public Investment Fund reveal the layered history between Musk and Saudi interests.

Elon Musk has recently improved relations with Saudi Arabia, especially following his participation in Donald Trump’s campaign. Trump’s intention to visit the kingdom and promote significant U.S. investments coincides with Tesla’s upcoming product launch in Riyadh on April 10, highlighting electric vehicles and innovations like solar technology and AI. Attendees will witness demonstrations from Tesla’s Cybercab and Optimus, a humanoid robot, although the market release dates remain undisclosed.

Tesla faces challenges, particularly a 42.6% decline in European sales this year, in part attributed to Musk’s political leanings. Meanwhile, electric vehicle adoption in Saudi Arabia is minimal, comprising only 1% of total car sales, as reported by PwC in 2024. Fuel-powered vehicles still dominate the region, with charging stations being scarce, presenting hurdles for Tesla’s market entry.

The renewed ties have roots in a public feud from 2018 over Musk’s privatization plans for Tesla, which involved the Saudi Public Investment Fund (PIF). Musk faced a lawsuit claiming he misled shareholders by suggesting he had “funding secured” for the buyout. Although he was acquitted of wrongdoing, communications revealed tensions with the Saudi fund, including Musk’s feelings of betrayal.

The changing dynamics were highlighted when Musk, along with Saudi officials, attended a UFC match in New York last November and participated virtually in Riyadh’s Future Investment Initiative summit. With Tesla ready to enter the Saudi market, it remains uncertain whether the kingdom will shift towards electric vehicles or continue favoring traditional automobiles.

In conclusion, Elon Musk’s relationship with Saudi Arabia appears to be mending, marked by significant upcoming events like the Tesla launch in Riyadh. Despite challenges in European markets and low electric vehicle sales in Saudi Arabia, the PIF’s ongoing investments reflect a complex yet evolving landscape. Past tensions highlight the intricate nature of their engagement, leaving open questions about the region’s future in electric mobility.

Original Source: www.marketscreener.com