Saudi Arabia is in talks with Tesla about setting up a manufacturing facility for electric vehicles to help diversify its economy, according to sources cited by the Wall Street Journal.
The talks are in their beginning stages, and the outcome is uncertain, it reported. A deal with the Saudis could be complicated, especially given the strained relationship between Elon Musk and the Saudi government, and the kingdom's existing partnership with Lucid, an electric-vehicle competitor.
The newspaper's sources revealed Saudi Arabia is trying to entice Tesla with an opportunity to acquire certain metals and minerals from the Democratic Republic of Congo and other countries for EV production. In June, the Saudis asked the Congolese government to secure assets in the country, which supplies 70% of the world's cobalt, the WSJ reported.
Sources say Saudi Arabia is considering a proposal that involves extending financing to commodities-trading giant Trafigura for a failing Congo cobalt and copper project. If successful, this could help supply a Tesla vehicle factory in the kingdom, the paper reported.
A successful deal with the Saudis could help Tesla reach its goal of selling 20 million vehicles annually by 2030, up from 1.3 million in 2022.
Saudi Arabia's broader initiative is to obtain metals from overseas, process them in-house, and integrate them into its renewable energy ecosystem, the WSJ reported.
The country and the U.S. are engaged in talks to secure access to metals from Africa that are crucial for the energy transition.
