Tesla, Saudi Arabia in early talks for EV factory

The Saudi Arabian government has shown interest in collaborating with Tesla, the U.S. electric automaker, to establish a manufacturing facility within the kingdom. This interest aligns with Saudi Arabia’s broader efforts to diversify its economy away from oil-related industries.

Saudi Arabia has reportedly been offering Tesla the opportunity to purchase specific quantities of metals and minerals required for electric vehicle production from various countries, including the Democratic Republic of Congo. These resources are essential for Tesla’s electric vehicle batteries.

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, is a significant investor in Lucid Group, an electric vehicle startup that aims to compete with Tesla in the electric vehicle market.

One of the proposals under consideration involves Saudi Arabia extending financing to commodities trader Trafigura for a cobalt and copper project in Congo. This project could potentially supply Tesla’s factory with the required materials, including cobalt. However, Trafigura is reviewing its options for the project due to cost concerns and low cobalt prices.

Tesla’s CEO, Elon Musk, announced in May that the company was likely to select a location for a new factory by the end of 2023. Currently, Tesla operates six factories worldwide and is building a seventh in Mexico.

Tesla has ambitious growth plans, aiming to sell 20 million vehicles annually by 2030, a substantial increase from its 2022 sales figure of approximately 1.3 million vehicles.