Sign up for insightful business news.
The Arab nation has been strenuously courting Tesla to get the world’s most valuable automaker to break ground on a factory there, sources told The Wall Street Journal. The problem, according to the WSJ piece — which Musk dismissed in a tweet as “utterly false” — is Saudi Arabia’s history with Musk. Still, with Musk even the most unequivocal of statements can be taken with a grain of salt… or maybe cobalt.
Schrödinger’s Sovereign Fund
Tesla makes its cars in three countries: the US, China, and Germany. It’s also building a $15 billion factory in Mexico, and while Musk has previously referred to some of its newer factories as “gigantic money furnaces,” the company is once again scouting for new countries to scale up its operations.
Sources told the WSJ that Saudi Arabia began wooing Tesla this summer as part of a broader play to establish itself in the global metals market. The nation has been trying to carve out revenue streams outside of its oil reserves, and it struck a deal in June with the Democratic Republic of Congo to secure rights to cobalt there. Sources told the WSJ that Saudi Arabia is using this deal as a carrot to draw Tesla in. Musk pushed back hard against the article, and it wouldn’t be a huge surprise if the billionaire felt a little scarred from his previous dealings with the country:
- The Saudi Arabian sovereign wealth fund, the PIF, played a role in Musk’s infamous 2018 “funding secured” tweet that led to an SEC settlement comprising two $20 million fines: one for Tesla and one for Musk personally.
- Musk blamed the skirmish with the SEC on the PIF governor at the time, Yasir Al-Rumayyan, who Musk said had “verbally” agreed to take Tesla private and then changed his mind.
Tesla’s Mamma Mia: Even if Musk and Saudi Arabia aren’t oil and water, the kingdom still faces stiff competition for Tesla’s attention. Turkish President Recep Erdogan made overtures to Musk at a meeting on Monday ahead of the UN General Assembly meeting in New York. Narendra Modi’s government has also been lobbying Tesla hard to set up shop in India, and is in the process of drafting new laws to foster EV manufacturers in the country. That’s a neat set of countries that Musk has managed not to enrage, either by suggesting they be annexed by China, or by undercutting their military strategies.