Saudi Arabia enters talks with Tesla following Erdogan’s pitch to Musk

Saudi Arabia enters talks with Tesla following Erdogan’s pitch to Musk
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Saudi Arabia reportedly discusses establishing a Tesla manufacturing unit in the kingdom, shortly after Turkish President Erdogan's pitch to Elon Musk.

Saudi Arabia is reportedly in preliminary discussions with American electric car giant Tesla to establish a manufacturing unit in the kingdom. According to a report by the Wall Street Journal, the talks have emerged shortly after Turkish President Tayyip Erdogan urged Tesla's CEO, Elon Musk, to consider Turkey as a viable location for a new vehicle manufacturing facility.

The developments are unfolding as Musk is scheduled to have a meeting with Israeli Prime Minister Benjamin Netanyahu in California today. The Saudi Arabia initiative comes as part of a broader strategy to diversify its economy, pivoting away from a heavy reliance on oil. Notably, the kingdom's sovereign wealth fund holds a majority stake in Lucid Group, a startup aiming to give Tesla stiff competition in the electric vehicle market.

In a bid to lure Tesla, Saudi Arabia is reportedly considering offering the company special privileges to secure necessary metals and minerals from various nations, including the Democratic Republic of Congo. Furthermore, financing options are being explored to aid commodities trader Trafigura in revitalizing a struggling cobalt and copper project in Congo, which might play a pivotal role in supplying a prospective Tesla facility.

While Trafigura is assessing its prospects regarding the Congo Mutoshi project amidst rising expenses and low cobalt prices, Tesla remains tight-lipped, not responding to queries from Reuters. Similarly, the Public Investment Fund of Saudi Arabia has chosen to withhold comments on the ongoing matter.

Earlier in May, Musk mentioned that Tesla is likely to finalize a site for a new manufacturing facility by the end of 2023. At present, the company operates six factories globally and is in the process of setting up a seventh in Mexico, specifically in the northern region of Nuevo Leon. This expansion is aligned with Tesla's ambitious goal to escalate its vehicle sales from approximately 1.3 million in 2022 to 20 million a year by 2030.