Tesla has officially launched in Saudi Arabia, marking a pivotal move into the Gulf’s largest economy as the electric vehicle (EV) pioneer grapples with falling global sales and stiff competition from Chinese and local manufacturers.
The California-based automaker debuted in the kingdom with a launch event in Riyadh on 10 April, followed by the opening of temporary showrooms in Riyadh, Jeddah, and Dammam.
The expansion comes just ahead of a planned visit by US President Donald Trump to Saudi Arabia and other Gulf nations.
Saudi Arabia, traditionally a haven for petrol-powered SUVs, is slowly embracing EVs as part of its broader Vision 2030 plan to diversify its economy.
Although EVs accounted for just 1% of all car sales in the kingdom last year, Tesla sees potential, especially as over 40% of Saudi consumers expressed interest in buying an EV within three years, according to PwC.
The kingdom’s sovereign wealth fund, the Public Investment Fund (PIF), is already a majority shareholder in U.S.-based Lucid Motors, which began assembling cars in Saudi Arabia in 2023.
Saudi Arabia is also developing its own domestic EV brand, Ceer Motors, in partnership with Taiwanese tech giant Foxconn, with plans to distribute vehicles from 2025.
Tesla’s arrival signals a potential thaw in previously strained ties between CEO Elon Musk and Saudi leadership. However, the automaker enters a competitive landscape — Chinese EV maker BYD is already active in the kingdom, and Lucid has first-mover advantage with local production facilities.
“Tesla won’t be a pioneer in the market,” said Tatiana Hristova of S&P Global Mobility.
“In Saudi Arabia, not anymore.” She added that Tesla could sell up to 15,000 units in its first two years, but will likely face strong headwinds from both Chinese and Saudi-made EVs.
Despite limited charging infrastructure, Saudi Arabia’s Electric Vehicle Infrastructure Company plans to install 5,000 fast-charging stations by 2030, supporting the national goal of making 30% of Riyadh’s vehicles electric within the next five years.
Tesla’s launch campaign in Saudi Arabia promotes not only vehicles like the Cybertruck and Cybercab but also showcases its humanoid robot, Optimus, as part of a broader vision for AI and clean energy.
The move offers both promise and peril for Tesla. While the market is underdeveloped, pent-up demand and the brand’s strong global appeal may give it a crucial early foothold.
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