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Saudi Prince says Teslas are nice, but he won't race you to buy

Oct 05 2018 22:00
Donna Abu-Nasr, Vivian Nereim, Stephanie Flanders and Nayla Razzouk, Bloomberg

Saudi Arabia’s wealth fund may have recently bought a big chunk of Tesla. But the country’s next king doesn’t seem that desirous of its electric cars.

Saudi Crown Prince Mohammed Bin Salman told Bloomberg News that he took a ride in a Tesla with the King of Jordan during a recent visit to Los Angeles. He enjoyed the experience, he said, though he wasn’t anxious to drive the car himself.

Asked whether he was tempted to take the wheel, Prince Mohammed said in an interview that “it didn’t come to my mind.” That said, the Tesla was “really smooth” and there was “no noise. I believe it will be a really promising industry in the future.”

Under the 33-year-old prince, Saudi Arabia has shown keen interest in investing in electric cars through its sovereign wealth fund. The Public Investment Fund (PIF) has built an almost 5% stake in Elon Musk-led Tesla and has agreed to invest more than $1bn (about R15bn) in electric-car startup Lucid Motors.

The prince said these bets don’t contradict the kingdom’s oil interests.

Musk’s controversy

Musk, 47, said in August that the Saudi PIF was interested in helping take Tesla private and publicised their enthusiasm about the idea to justify his claim that he had the “funding secured” to buy out investors at $420 a share.

He’s stoking controversy about the ordeal again this week by attacking short sellers and the US Securities and Exchange Commission, just days after settling the agency’s fraud lawsuit.

An August 13 blog post by Musk describing meetings with unnamed PIF officials about taking Tesla private stirred unease among Saudis, people familiar with the matter told Bloomberg in August.

While PIF officials were open to making a significant investment in Musk’s efforts, the fund was only interested in a minority stake, wanting to limit its exposure to a single deal and save resources for other projects, the people said.

‘Maybe tomorrow’

Tesla showrooms probably will open in Saudi Arabia in one or two years, as foreign companies are now allowed to fully own operations they build in the kingdom, Prince Mohammed said.

According to Tesla’s website, the company’s presence is thus far far limited to only two cities in the Arab world: Dubai and Amman, Jordan’s capital.

It’s not clear how many Teslas there are in Saudi Arabia today. By the end of 2017, there were just five electric cars imported into Saudi Arabia, according to a statement from an official at the Saudi Standards, Metrology and Quality Organisation, SASO, in Makkah newspaper.

Prince Mohammed said he hasn’t met Musk and was noncommittal about whether he might order a Tesla for himself. “Maybe not today,” he said. “Maybe tomorrow.”

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tesla  |  elon musk  |  saudi arabia
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