Elon Musk firmly denies reports of Tesla engaging in preliminary discussions to establish an electric vehicle (EV) plant in Saudi Arabia. The Wall Street Journal recently claimed that Saudi Arabia has been enticing Tesla with the promise of access to specific quantities of metals and minerals required for their EVs. Such a deal with the Saudi Arabian government could assist Musk in achieving his ambitious target of selling 20 million vehicles annually by 2030, a significant increase from the 1.3 million sold in 2022. However, Musk quickly refuted the claims made by the WSJ, posting a screenshot of the article on social media with the caption, “Yet another utterly false article from WSJ.”
The report by the Wall Street Journal suggests that individuals familiar with the matter have revealed that Saudi Arabia and Tesla are engaged in talks regarding the establishment of a manufacturing facility in the country. If true, this move would align with Saudi Arabia’s broader objectives of diversifying its economy away from oil and securing the necessary metals to support the production of electric cars. The article cautions that these discussions are in their early stages and could potentially encounter obstacles, mainly due to Elon Musk’s contentious relationship with the Saudi Arabian government.
Interestingly, this report emerges shortly after Turkish President Tayyip Erdogan urged Musk to consider constructing a vehicle factory in Turkey. Furthermore, Musk is scheduled to meet Israeli Prime Minister Benjamin Netanyahu during his visit to California. The Wall Street Journal article also highlights Saudi Arabia’s efforts to source metals and minerals from other countries, including the Democratic Republic of Congo, which possesses the world’s largest cobalt mines. However, concerns are raised regarding the labor conditions in these mines, with claims of workers, including tens of thousands of children as young as four, toiling under slave-like conditions. The means by which Saudi Arabia will obtain minerals from the Democratic Republic of Congo remain unclear.
Saudi Arabia’s attempts to shift its economy away from oil have involved entering billion-dollar agreements with several countries to collaborate on the development, manufacturing, and sales of electric vehicles. In June, the Saudi Ministry of Investment signed a substantial deal worth $5.6 billion with China’s electric car maker Human Horizon. Additionally, the Lucid Group, based in the United States, announced in August that its first overseas plant in Saudi Arabia will commence limited production of Lucid Air EVs this month. However, it is worth noting that Elon Musk’s Tesla currently dominates the electric vehicle market in the Middle East.
One proposal being considered by Saudi Arabia involves extending financing to commodities trader Trafigura for a struggling cobalt and copper project in the Congo. This development could potentially provide a Tesla factory with the necessary supplies. A spokesperson for Trafigura stated that the company is reviewing options for the Mutoshi project in Congo due to escalating costs and persistently low cobalt prices. The discussions between Elon Musk and Saudi Arabia come shortly after the country’s judicial system handed down a death sentence to Mohammad bin Nasser al-Ghamdi. Musk, known for advocating for free speech, has yet to acknowledge this particular instance of human rights abuse.
At the time of reporting, Tesla had not responded to requests for comments from Reuters, while the Public Investment Fund of Saudi Arabia declined to provide a statement. In May, Musk announced that Tesla aims to finalize the selection of a new factory location by the end of 2023. Currently, the company operates six factories and is constructing its seventh in Mexico’s northern Nuevo Leon state. The Wall Street Journal’s claims emerge amid a series of widely publicized human rights violations perpetrated by the Saudi Arabian regime, which has been increasingly cracking down on dissenting voices. Recently, a court sentenced a retired Saudi teacher, Mohammad bin Nasser al-Ghamdi, to death for posting critical tweets about the regime, accusing him of promoting individuals seeking to destabilize public order on Twitter and YouTube.
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