Tesla in Talks with Saudi Arabia for An EV Factory in Saudi Arabia

Saudi Arabia is in early talks with Elon Musk promoted electric vehicles maker Tesla to set up a manufacturing facility in the kingdom, the Wall Street Journal reported on Monday, citing sources familiar with the matter.

Saudi Arabia has been trying to win Tesla with the right to purchase certain quantities of metals and minerals the company needs for its electric vehicles from countries, including the Democratic Republic of Congo, the report said.

With this report, Tesla stock gains ground and rose 0.3% on premarket trading on Monday.

Saudi has been trying diversify its economy away from oil. The kingdom's economy slowed in the second quarter as oil-production cuts and a drop in prices pushed the country from being one of the fastest-growing Group of 20 countries to one of the slowest.

Interestingly, Saudi Arabia, with its sovereign Fund, is also an investor in former Tesla VP founded Lucid Motors, an American manufacturer of electric luxury sports cars and grand tourers. Lucid and Aston Martin have a common shareholder in Saudi Arabia's Public Investment Fund (PIF). The Saudi wealth fund became Aston Martin's second-largest shareholder last year.

Saudi Arabia aims to have at least 30% of all cars in the Kingdom electric-powered by 2030 and Public Investment Fund (PIF)-backed Lucid Motors is preparing to roll out its first fully Saudi-assembled electric car by Q3 2023.

Tesla, which currently has six factories and is building a seventh in Mexico in northern Nuevo Leon state, and Elon Musk had said that Tesla would zeroed in for a new location for its next gigafactory by the end of 2023.

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