Tesla launches operations in Saudi Arabia amid improved relations

11/4/2025 6:21

Tesla launched

operations in Saudi Arabia on Thursday, a sign that Chief

Executive Elon Musk has patched up relations with the kingdom

and that the oil capital was moving forward with an ambitious

electric-vehicle policy.



A Tesla Cybertruck and a redesigned Model Y sedan dominated

a plaza dotted with palm trees, as the EV maker officially

opened for business. A small crowd tried out the vehicles as a

massive outdoor video screen showed a Cybertruck plowing through

a dusky desert, leaving behind plumes of sand.

Tesla needs new customers: globally, it posted a 13% drop in

first-quarter sales, its weakest performance in nearly three

years, driven by a backlash against Musk's role in the Trump

administration, rising competition and an aging product lineup,

beyond the refreshed Model Y.

The kingdom, a major investor in Tesla rival Lucid,

aims for 30% EV adoption five years from now, up from about 1%

last year. Musk engaged in a high-profile feud with the

kingdom's sovereign wealth fund over a potential investment

nearly a decade ago, but relations between Riyadh and Musk have

improved since he took a high-profile role in U.S. President

Donald Trump's election campaign and administration. Trump is

set to visit Saudi Arabia in the coming weeks in his first

foreign trip.

Local Tesla executives at the launch described plans to allow

online ordering of vehicles, open pop-up stores in malls and to

build Supercharger stations and service centers, but Musk did

not show up in person or by video. "I’m honestly very

disappointed I cannot see him," said fan Mohammed Usama, who

said he was "in love" with the Cybertruck. "I was very close to

the stage, but unfortunately he didn't come."



Saudi has a long way to go to hit its EV goals. The

country's main east-west highway does not have a single charging

station in the 900-kilometer (559 mile) stretch linking the

financial and religious cities of Riyadh and Mecca. Saudi Arabia

in 2024 had just 101 EV charging stations, compared with 261 in

neighboring United Arab Emirates, a country with a third the

population, data from Statista based on Electromaps showed.

Tesla plans to put its first charging stations in three cities.

Rival EV brands like China's BYD and Zeekr,

along with the Saudi Public Investment Fund-backed Lucid,

already have Saudi beachheads.

The feud between Musk and the governor of the kingdom's

sovereign wealth fund began when Musk tweeted in 2018 that he

had "funding secured" to take Tesla private after a meeting with

the fund. That led to a lawsuit from investors when a bid failed

to materialize. "You are throwing me under the bus," Musk wrote

in a text to fund chief Yasir Al-Rumayyan, according to court

documents.



Shortly after the U.S. presidential election, Trump,

Rumayyan, and Musk were all pictured together sitting in

ringside seats at an Ultimate Fighting Championship event in an

early signal that relations had healed.