Saudi Arabia is in talks with Tesla about setting up a manufacturing facility there, people familiar with the discussions said, as part of an ambitious push by the kingdom to secure metals needed for electric vehicles and help diversify its economy away from oil. The talks are at a very early stage and could fall apart.
Any deal could be fraught with complications, given Tesla Chief Executive Elon Musk’s contentious relationship with the Saudis as well as the kingdom’s existing partnership with the company’s electric-vehicle rival Lucid Group. Saudi Arabia has been wooing Tesla with the right to purchase certain quantities of metals and minerals the company needs for its EVs from countries including the Democratic Republic of Congo, some of the people said.
The Saudis approached the Congolese government in June about securing assets in the country, which supplies around 70% of the world’s cobalt, The Wall Street Journal has reported. One of the proposals Saudi Arabia is considering involves extending financing to commodities-trading giant Trafigura for a flailing Congo cobalt and copper project, which could ultimately help supply a Tesla vehicle factory in the kingdom, people familiar with the matter said.
If successful, a deal with the Saudis could help Tesla realize its aspirations to sell 20 million vehicles a year by 2030, up from around 1.3 million in 2022. Toyota was the top-selling automaker globally in 2022, with 10.5 million vehicles.
Lucid, which is majority-owned by the Saudi Public Investment Fund, is expected to start conducting vehicle reassembly on a limited scale this month at its first international plant on the kingdom’s Red Sea coast as it ramps up to produce 150,000 cars annually. Musk has said Tesla. Read more on livemint.com