Portuguese 
English 
Spanish 
3 min of reading 
0 comments 
Tesla Faces Sales Drop and Shifts Focus to Saudi Arabia. Company Seeks New Opportunities in Strategic Region. See Elon Musk’s Plans
Tesla has officially announced its entry into the Saudi Arabian market. The launch is set for April 10, at an event in Riyadh that will showcase the brand’s electric vehicles, solar energy solutions, and also the Optimus humanoid robot and the Cybercab autonomous mobility concept.
The debut marks the end of a long estrangement between the American automaker and the Gulf kingdom. According to a statement published on Tesla’s website, the relationship had been marked by tensions with the Saudi sovereign fund, the Public Investment Fund (PIF), which now appear to be overcome.
Challenging Market for Electric Cars
The company arrives in a market where electric vehicles are still uncommon. According to a 2024 report by PwC, EVs account for only 1% of car sales in Saudi Arabia. Despite this, brands such as the Chinese BYD and the American Lucid — mostly controlled by the PIF — are already operating in the country.
-
Foxconn wants to bring electric cars to Brazil and could transform the iPhone manufacturer into a new mobility force with Foxtron models.
-
Residents are trying to prevent electric cars from charging inside buildings due to fear of battery fires, placing condominiums at the center of a dispute between safety, misinformation, and the future of mobility.
-
Electric bus made in Brazil and technology that transforms agricultural waste into clean ethanol can reduce diesel dependence and open a new phase for the national energy industry.
-
Top 10 electric motorcycles in 2026 that are revolutionizing urban mobility with economy, surprising range, and performance that challenges combustion models
The local market is dominated by large cars powered by cheap fossil fuels. Furthermore, the charging infrastructure for electric vehicles is still quite limited.
Even with this scenario, Tesla is betting on expansion and has announced that in the weeks following the launch event, it will reveal its investment plans for the country.
Shortly after the official presentation, on April 11, the company will open temporary stores — called pop-up stores — in three major cities: Riyadh, Jeddah, and Dammam. The stores will serve as product display points and direct sales channels to consumers.
2018 Crisis Began the Break
The entry into the country also represents a significant change in the relationship between Elon Musk, Tesla’s CEO, and the Saudi government. The conflict began in 2018 when Musk stated, at the time via Twitter, that he had “secured funding” to take Tesla private.
The statement referred to a meeting with representatives of the PIF, but the deal never materialized.
The situation led to a lawsuit and the release of messages exchanged between Musk and the fund’s chairman, Yasir al-Rumayyan. In one of them, the entrepreneur accused the executive of “throwing him under the bus,” indicating a strong disagreement.
Approach with Trump Opens New Paths
The scenario began to change in late 2023. Musk appeared alongside Rumayyan and President Donald Trump at a UFC event in New York. Shortly before, Tesla’s CEO had participated, via video, in the Future Investment Initiative conference, which took place in Riyadh.
The new rapprochement between Musk, the Saudi government, and Trump seems to have been strategic. The U.S. president has already indicated he plans to visit Saudi Arabia.
In a recent request, Trump asked the kingdom to invest over US$ 1 trillion in the American economy over four years. This kind of political maneuvering may have directly influenced Tesla’s direction in the Gulf.
Tesla Advances in the Gulf, but Faces Drops in Europe and Criticism in the U.S.
Despite advances in the Middle East, Tesla faces challenges in other markets. In Europe, the company’s electric vehicle sales have dropped by 42.6% year-to-date.
Analysts point out that Musk’s public image, associated with far-right politicians, has negatively affected the brand on the continent.
In the United States, the entrepreneur also faces criticism. As the head of the newly created Department of Government Efficiency, Musk has been blamed for cuts to public programs, freezing international funds, and mass layoffs.
Meanwhile, Tesla’s entry into Saudi Arabia reveals the complexity of the current scenario. The automotive industry is rapidly transforming, and business decisions are increasingly tied to political and geopolitical factors.
The company has not yet disclosed the values involved or the models that will be sold in the country. However, the announcement of investments and the opening of the first stores indicate that Tesla is betting on a lasting presence in the largest automotive market in the Middle East.
With information from Automotive News.
Be the first to react!