Tesla is set to expand its footprint in the Middle East, officially entering Saudi Arabia, the Gulf region’s largest economy. The EV giant announced an April 10 launch event in the kingdom, where it will showcase its electric vehicles and highlight innovations in AI and autonomous driving.
Saudi Arabia, a nation known for its vast oil reserves, has been slow to embrace electric vehicles. According to a September report by consultancy PwC, EVs account for just over 1% of total car sales in the country. Tesla’s entry into this market could be challenging, as consumer adoption remains low. However, the company hopes to change perceptions by offering cutting-edge technology, including its Cybercab autonomous driving experience and a demonstration of its humanoid robot, Optimus.
Tesla’s expansion comes at a time when the company is battling setbacks on multiple fronts. In 2024, it experienced its first annual decline in sales since going public, recording a 1% drop. Meanwhile, competition in the EV sector has intensified, particularly from Chinese automaker BYD.
BYD reported $107 billion in revenue for 2024, surpassing Tesla’s $98 billion. The company also unveiled an ultra-fast charging system capable of adding 250 miles (402 km) of range in just five minutes—far outpacing Tesla’s Superchargers, which take 15 minutes to provide 200 miles of range.
Tesla’s sales in Europe have also taken a hit. In February, the company saw a 40% decline in vehicle sales compared to the same period in 2024, according to the European Automobile Manufacturers’ Association.
Even on home turf, Tesla is facing difficulties. CEO Elon Musk’s involvement in the US government, where he heads the Department of Government Efficiency, has sparked controversy, leading some consumers to distance themselves from the brand.
This has resulted in falling resale values for Tesla vehicles, despite growing interest in used EVs overall. Additionally, Tesla showrooms, charging stations, and cars have become targets of vandalism in the US, prompting the FBI to establish a task force to curb what it calls “violent Tesla attacks.” Protests have also erupted at Tesla locations, with demonstrators calling for Musk to step down from his government role.
Investor confidence in Tesla has been shaken amid these challenges. Since reaching an all-time high in December, the company’s stock has plummeted by 40%, reflecting growing uncertainty about its future.
Despite these obstacles, Tesla remains focused on expansion and innovation. Its entry into Saudi Arabia marks a strategic effort to capture new markets and drive EV adoption in regions where it remains low. However, with strong competition, declining sales, and mounting controversies, Tesla faces an uphill battle in maintaining its dominance in the global EV industry.
