Elon Musk’s Tesla plans to launch into the Saudi Arabian market this quarter. This expansion follows Tesla’s previous presence in other Gulf countries such as Dubai, Jordan, Qatar, and Israel. According to sources familiar with Tesla’s strategic initiatives, the company will utilise pop-up stores for sales before establishing a permanent showroom and service centre.
As part of its entry strategy, Tesla is also set to implement a supercharger network that will cater not only to its own vehicles but will be accessible to other electric vehicle (EV) brands as well. This move is expected to bolster the availability of charging infrastructure, an area that currently poses challenges for EV adoption in the kingdom.
Despite being a major oil producer, Saudi Arabia’s electric vehicle market remains in its infancy, with EV penetration slightly above 1 percent of overall car sales. This finding is supported by PwC’s 2024 Electric Mobility Outlook, which highlights that only 7 percent of the models available in the country are electric. The existing charging infrastructure is still limited but growing very quickly. There were just 104 charging stations across the nation at the start of 2023, but there will be thousands by the end of 2025.
The Saudi government has set an ambitious target: to ensure that 30 percent of vehicles in Riyadh—often identified as the most congested city—are electric by the year 2030. This objective is part of broader efforts aimed at reducing urban emissions by 50 percent. Interest in electric vehicles is reportedly on the rise, with over 40 percent of Saudi consumers indicating they are considering purchasing an EV within the next three years.
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In addition to Tesla, the Gulf’s electric vehicle landscape is becoming increasingly competitive with many international brands, such as global New Energy Vehicle (NEV) leader BYD entering the market last year.
The UAE currently leads the Gulf in EV adoption and is heavily investing in its charging networks to support its ambitious goal of having EVs account for 15 percent of new car sales by 2030.
Saudi Arabia is also progressing toward developing its EV investment and manufacture. The US-based Lucid Group, which has a 60 percent stake from the Public Investment Fund and a manufacturing facility in the Kingdom, achieved deliveries of 10,241 vehicles in 2024, eclipsing expectations. The US company Rivian, backed by the Saudi conglomerate Abdul Latif Jameel and Amazon, has also reported stronger-than-expected deliveries in the last quarter of 2024.
Additionally, Ceer—an ambitious joint venture between the Public Investment Fund and Taiwan’s Foxconn—plans to commence EV production in 2025, with a target to manufacture 500,000 vehicles annually by 2030 for both domestic consumption and export.
Tesla’s market entry into Saudi Arabia comes at a time when the global EV landscape is seeing substantial shifts. Notably, Chinese brands have surged ahead, accounting for around two-thirds of global EV sales in 2024, showcasing a remarkable year-on-year growth. Despite facing its own challenges, Tesla’s entry into Saudi Arabia will be important for the domestic and regional EV market.
