The Tesla electric vehicle company owned by billionaire Elon Musk on Thursday opened its first showrooms in oil-rich Saudi Arabia — where hybrid cars remain a rare sight.
The opening of showrooms in the capital Riyadh, Jeddah and Damam comes as Tesla global sales fall.
Showrooms in the United States have been attacked, reportedly because of links between Musk, the world’s richest person, and US President Donald Trump. The company’s share price has slumped since Musk started working with the US government.
“Today we are proud to officially launch in the kingdom,” said Naseem Akbarzada, Tesla country manager for Saudi Arabia, hailing the start of a “long-term presence”.
He added that charging stations for electric cars would be opened from Friday in the three cities where the showrooms had been established, with more to follow.
Saudi Arabia is a key regional US ally and Trump forged close ties during his first term with Crown Prince Mohammed bin Salman, who has promised to inject $600 billion into US trade and investments.
Mainly young Saudis gathered to look at the Tesla cars, even though demand for electric vehicles is low in Saudi Arabia.
The world’s largest oil exporter enjoys bargain-basement fuel prices with a litre of petrol costing just 2.33 riyals ($0.62).
Cheap fuel and prolonged periods of extreme heat in the vast desert country means big oil-consuming cars reign supreme.
Saudi economist Mohammed Al-Qahtani welcomed Tesla’s move, but urged more efforts by Musk’s firm.
“We do not want a showroom; we want a factory,” he said. “We want to be part of the production process, not just consumption.”
A lack of charging infrastructure and the country’s vast size mean that many Saudi drivers will view EVs as suitable for shorter trips, rather than as replacements for conventional vehicles.
About 950 kilometres (590 miles) separate the capital from second city Jeddah — more than the maximum range of most electric car batteries.
According to data platform Statista, before Tesla’s arrival Saudi Arabia had just 101 charging stations, compared with 261 in the much smaller neighbouring United Arab Emirates.
Although the Saudi EV market remains small, it tripled last year to nearly 800 cars, according to business news outlet Al-Iqtisadiyah.
Authorities are seeking to diversify the economy, which relies heavily on oil, aiming to install 5,000 electric vehicle chargers by 2030.
Saudi Arabia’s sovereign wealth fund, PIF, now controls 60 percent of luxury electric vehicle company Lucid.
It has also secured a deal with South Korea’s Hyundai to establish a plant in the kingdom for electric and petrol-powered cars.
Saudi EV brand CEER, launched in 2022, plans to start production in 2025.
A vehicle from Lucid, which opened a factory in Jeddah in 2023 after a billion-dollar Saudi investment, costs $92,000.
Last May, Chinese company BYD opened a showroom in Riyadh, selling more affordable electric cars.
