TESLA IS HEADED TO SAUDI ARABIA, YEARS AFTER INFAMOUS TWEET

Saudi Arabia is getting Tesla. Just not like investors imagined a few years ago.

The electric vehicle maker recently said it was expanding to the Middle Eastern kingdom and would host a launch event in April.

Tesla vehicles aren’t available in every country on Earth, and expansion represents growth opportunities for the company. Saudi Arabia has about 33 million people and a nominal gross domestic product per capita similar to South Korea’s. Annual car sales are in the range of 800,000 vehicles.

The size of the market isn’t the main reason Saudi Arabia is noteworthy for Tesla investors. Funds tied to the government tried to buy Tesla once, according to CEO Elon Musk.

Saudi money was behind the August 2018 “funding secured” tweet in which Musk said he had lined up the money to take the car maker private. That resulted in Musk and Tesla paying $40 million in fines to settle the matter with the Securities and Exchange Commission.

Of course, Tesla remained a public company, likely to the delight of investors. At the time of the tweet, Tesla was valued at close to $60 billion. Today, it is valued closer to $850 billion.

Tesla wasn’t generating free cash flow in 2018, but turned the corner in 2019, reducing its reliance on external capital.

After the Tesla fiasco, Saudi Arabia ended up backing Lucid. Saudi funds still hold almost 60% of Lucid stock. The country also buys Lucid vehicles. Saudi purchases accounted for almost 25% of Lucid‘s 2024 revenue.

Saudi Arabia has one more Tesla tie. Its national oil company Aramco is one of the most important oil producers on the planet, valued at about $1.7 trillion, but Tesla exists partly to wean the world off fossil fuels.

It has built an impressive car and renewable-power business based around that goal. In 2022, Musk said that Tesla could be worth more than Aramco and Apple combined. At the time, that would have valued the EV maker at more than $4 trillion. Today, the combined value is about $5 trillion.

In December, Tesla’s market value reached about $1.6 trillion, leaving it far behind.

Tesla stock lost 5.6% closing at $272.06, while the S&P 500 and Dow Jones Industrial Average fell 1.1% and 0.3%, respectively.Coming into Wednesday trading, Tesla stock had risen for five consecutive days, gaining almost 30% over that span.

Lucid stock fell 3.1%, closing at $2.36 a share, giving the company a market value of about $7.1 billion.

Write to Al Root at [email protected]

2025-03-26T17:40:02Z