According to sources familiar with the matter, Saudi Arabia is engaging in preliminary discussions with electric automaker Tesla to potentially establish a manufacturing facility in the kingdom. This news comes shortly after Turkish President Tayyip Erdogan urged Tesla CEO Elon Musk to consider building a vehicle factory in Turkey.
In their attempts to court Tesla, Saudi Arabia has offered the company the opportunity to acquire specific quantities of metals and minerals necessary for the production of electric vehicles. These resources would be procured from various countries, including the Democratic Republic of Congo.
Saudi Arabia has been actively working to diversify its economy away from its dependence on oil, with its sovereign wealth fund serving as the majority investor in Lucid Group, an electric vehicle startup aiming to challenge Tesla’s industry dominance.
One proposal being considered by Saudi Arabia is to provide financing to commodities trader Trafigura for a struggling cobalt and copper project in Congo. This arrangement would potentially supply Tesla’s factory with the required resources. However, Trafigura has announced that it is reviewing options for the Mutoshi project due to rising costs and consistently low cobalt prices.
Neither Tesla nor Saudi Arabia’s sovereign fund, the Public Investment Fund, have responded to requests for comment at this time.
In May, Musk revealed that Tesla would likely select a location for a new factory by the end of 2023. As of now, the company already operates six factories, with a seventh under construction in northern Mexico. Tesla’s objective is to sell 20 million vehicles annually by 2030, a significant increase from the estimated 1.3 million vehicles it expects to sell in 2022.
Sources:
– Wall Street Journal
– Reuters