Saudi Arabia is reportedly in preliminary talks with Tesla to build a factory there. However, Musk himself refuted the report. Reports say the talks are still at a very early stage and could fall apart. Any deal would likely be fraught with complications, given Tesla CEO Musk's tense relationship with Saudi officials and the kingdom's investment in Tesla rival Lucid.

Saudi Arabia has been courting Tesla, promising to allow the company to purchase metals and minerals needed for electric vehicles from countries such as the Democratic Republic of the Congo, people familiar with the matter said.

Previously, it was reported that in June this year, the Saudi Public Investment Fund (PIF) approached the government of the Democratic Republic of the Congo, hoping to acquire assets in Congo through its joint venture Manara Minerals with Saudi state-owned mining company Ma‘aden. The Democratic Republic of the Congo is the world's largest cobalt producer, accounting for approximately 70% of global supply.

One of the proposals being considered by Saudi Arabia is to provide financing for a troubled cobalt-copper project in the Democratic Republic of the Congo by commodities giant Trafigura, which could eventually be used to provide metal for Tesla's factory in Saudi Arabia, people familiar with the matter said. It is reported that Saudi Arabia has begun separate negotiations with Trafigura, which is seeking financial support for a cobalt and copper project in the Democratic Republic of the Congo.

Tesla aims to sell 20 million electric vehicles per year by 2030. Musk has said Tesla may need about a dozen factories to achieve its goals.

Tesla currently produces cars at four factories in China, the United States and Germany. The company also announced in March this year that it would produce cars in Mexico.

Saudi officials said the PIF began courting Tesla this summer, and that the kingdom's crown prince had wanted Tesla to build a factory in the kingdom for years. According to Saudi officials, Tesla is considering the proposal but may ultimately reject it.

Musk once had bad relations with PIF

It is worth mentioning that Musk once had a bad relationship with PIF. In August 2018, Musk announced on Twitter (now renamed X) that he would privatize Tesla and had secured financial support. He later said that he had had many conversations with PIF and believed that it could provide sufficient funds to privatize Tesla.

However, Musk's plan to take Tesla private ultimately came to nothing, and he himself got into legal trouble as a result.

Not only that, PIF invested US$1 billion in Lucid in 2028, becoming the latter's largest shareholder. PIF invested an additional US$915 million and US$1.8 billion in Lucid in December last year and June this year respectively, and currently holds approximately 60.5% of the latter's issued common shares.

Musk responded

On Monday (September 18) local time, Musk himself responded to this report on X. He said this was another article that was completely wrong.