Tesla Enters Saudi Market Amid Sales Slump and Growing Competition

Tesla has officially launched in Saudi Arabia, marking a strategic move into a market still in the early stages of electric vehicle (EV) adoption but with major long-term potential.

Despite being a global oil hub, Saudi Arabia is investing heavily in EV infrastructure and manufacturing as part of its Vision 2030 initiative to reduce its reliance on oil. EVs accounted for just 1% of car sales in the kingdom last year, but that number is expected to grow rapidly.

Tesla’s entry comes at a challenging time. Sales have dropped sharply, especially in Europe, and CEO Elon Musk’s role in the Trump administration has sparked backlash. However, the launch — beginning with a high-profile event in Riyadh — could help the brand tap into the Gulf’s rising EV interest.

Tesla’s expansion aligns with Saudi Arabia’s goal to make 30% of Riyadh’s cars electric by 2030. The kingdom already has a strong EV presence: it holds a majority stake in Lucid Motors and has developed its own local EV brand, Ceer Motors, in partnership with Foxconn.

But Tesla will not have the first-mover advantage. Chinese EV giant BYD is already active in the market, and Lucid’s presence is expanding. Analysts predict stiff competition, with S&P Global Mobility forecasting 10,000 to 15,000 Tesla units sold in the kingdom over the next two years.

While Saudi Arabia’s EV infrastructure is still developing, plans are underway to install 5,000 fast chargers nationwide by 2030. Market analysts say pent-up demand for Tesla in Saudi Arabia could drive strong initial sales, even as competition intensifies.

As Tesla enters the Saudi arena, it faces both promising opportunities and growing challenges in a market that’s quickly becoming a focal point of the global EV race.