Riyadh: The Tesla electric vehicle company owned by billionaire Elon Musk opened its first showroom in oil-rich Saudi Arabia on Thursday – hybrid cars are still a rare sight.
Showrooms in the capital Riyadh, Jeddah and Dham opened as Tesla’s global sales declined.
The showroom in the United States was reportedly under attack because of the connection between the world’s wealthiest person and U.S. President Donald Trump. The company’s stock price has been declining since Musk began working with the U.S. government.
“Today, we are honored to be officially launched in the Kingdom,” said Tesla’s national manager Naseem Akbarzada.
He added that charging stations for electric vehicles will be open from three cities established in the showroom on Friday, and more.
Saudi Arabia is a major ally in the U.S. region, and Trump has established close ties during his first term with Crown Prince Mohammed bin Salman, who has committed to inject $600 billion into U.S. trade and investment.
Although Saudi Arabia has low demand for electric vehicles, major Saudis gather to watch Tesla cars.
The world’s largest oil exporter enjoys bargaining fuel prices, with a liter of gasoline priced at just 2.33 riyals ($0.62).
In a vast desert country, cheap fuel and long extreme heat mean that large cars that consume fuel are supreme.
Saudi economist Mohammed al-Qahtani welcomes Tesla’s move but urges Musk’s efforts.
“We don’t want a showroom; we want a factory,” he said. “We want to be part of the production process, not just consumption.”
The lack of charging infrastructure and the huge scale of the country means that many Saudi drivers believe electric vehicles are suitable for shorter travel rather than replacement for traditional vehicles.
About 950 kilometers (590 miles) separates capital from the second city of Jeddah – exceeding the maximum range of most electric vehicle batteries.
According to data from data platform Statista, Saudi Arabia had only 101 charging stations before Tesla arrived, compared with 261 in the United Arab Emirates.
Although Saudi Arabia’s electric vehicle market remains small, nearly 800 cars were added last year, according to business news media al-iqtisadiyah.
Authorities are seeking diversified economic diversification, which relies heavily on oil to install 5,000 electric vehicle chargers by 2030.
Saudi Arabia’s sovereign wealth fund PIF now controls 60% of luxury electric vehicle company Lucid.
It also reached an agreement with South Korea Hyundai to establish factories for electric and gasoline-powered vehicles in the Kingdom.
Saudi EV Brand Ceer was launched in 2022 and production is scheduled to begin in 2025.
A vehicle from Lucid opened a factory in Jeddah in 2023 after investing $1 billion in Saudi in 2023, at a cost of $92,000.
Last May, Chinese company Biat opened a showroom in Riyadh and sold more affordable electric vehicles.
