According to a report from the Wall Street Journal, Tesla and Saudi Arabia are engaged in discussions about the possibility of building an electric vehicle (EV) factory in the country. The talks are part of Saudi Arabia’s larger plan to diversify its economy away from oil and secure metals needed for the production of EVs.
The Kingdom of Saudi Arabia has already invested in Lucid Motors, an EV startup that was initially spun out of Tesla. As part of the deal, Lucid Motors agreed to construct a factory in the country. Now, Saudi Arabia is reportedly targeting Tesla for a potential partnership.
This is not the first time Saudi Arabia has expressed interest in collaborating with Tesla. In 2018, Elon Musk, the CEO of Tesla, held discussions with the head of Saudi Arabia’s investment fund. However, Musk ultimately decided against using Saudi Arabia’s funding to take Tesla private.
As an incentive to bring Tesla back to the negotiating table, Saudi Arabia is offering the rights to purchase cobalt from the Democratic Republic of Congo (DRC), a country that supplies approximately 70% of the world’s cobalt. While Tesla has been gradually reducing its reliance on cobalt in its batteries, the mineral still plays an important role in the production of high-energy-density battery cells.
It is important to approach this report with caution, as it is based on sources familiar with the discussions rather than official statements. Many countries are vying to attract Tesla factories, and these “early talks” could simply mean that Saudi Arabia has expressed its interest in establishing a manufacturing facility with Tesla.
– Wall Street Journal