Tesla trumpets Saudi launch but China is waiting

April 14, 2025, 1:37 PM

Visitors look at the Tesla Model Y during the opening of Tesla's first Saudi showroom, in Riyadh

EV maker opens Riyadh showroom
Charging infrastructure lacking
US tariffs can benefit China

Tesla’s well-publicised launch event in the Saudi capital, Riyadh, last week attracted a large and boisterous crowd.

But the competition is stiff, especially from the Chinese, now the world’s largest maker of EVs, and the charging infrastructure for electric-powered vehicles in the world’s second-largest oil producer is still lacking.

Saudi Arabia wants 30 percent of the cars on its roads to be electric vehicles by 2030. That implies average annual sales of one million EVs for the next five years.

“Tesla won’t be a pioneer in the market,” Tatiana Hristova, a vehicle sales forecast director at S&P Global, told the broadcaster CNBC last week. “In other countries, it was very often the first one; in Saudi Arabia, not anymore.”

In the neighbouring UAE, the EV market surged almost four-fold last year, accounting for 6 percent of total vehicle sales, according to the automotive data provider Focus2Move.

While Tesla does not release official sales figures for the UAE, Focus2Move estimates that the company sold approximately 6,500 vehicles in 2024, taking more than 40 percent of the market.

Tesla entered the Gulf market in 2017 with a showroom in Dubai, and also operates in Qatar, Jordan and Israel.

In sharp contrast to the UAE, EVs made up barely 1 percent of sales in Saudi Arabia in 2023, though the professional services company PwC says more than 40 percent of consumers are considering an EV purchase within three years.

That should be good news for Tesla and its competitors, such as China’s BYD. The Chinese company’s global market share, at 22 percent, is more than double that of Tesla.

Tesla’s vice-president, Omead Afshar, told the crowd at the launch event in Riyadh last week that the event marked the start of Tesla’s long-term presence in Saudi Arabia. “Tesla is here to stay. We’re not visitors,” he said.

The not-so-good news, however, is the limited charging infrastructure for EVs in Saudi Arabia.

Whereas the UAE, with a population one third the size of Saudi Arabia, has almost 300 charging stations, the kingdom, which is 25 times bigger by land area, only has just over 100.

Tesla’s Model Y has a maximum range of 527 kilometres. But the 900km highway from Riyadh to Mecca does not have a single charging point.

The Saudi government has said it intends to invest $50 billion in charging infrastructure and EV manufacturing.

The Electric Vehicle Infrastructure Company (Eviq), a joint venture between the Public Investment Fund, the Saudi sovereign wealth conglomerate, and the state-owned Saudi Electricity Company, has said it will install 5,000 chargers throughout the kingdom.

Tesla, too, has pledged to develop a string of “super chargers” across Saudi Arabia, Afshar said last week. “We strongly believe that we are aligned with the kingdom’s plan,” he said.

With the onset of a trade war between the US and China, competition between global car makers may only intensify.

As a result, Saudi Arabia, the UAE and other Gulf markets may benefit from more competitively priced cars from China, Europe and Japan after the US imposed tariffs on imported vehicles this month and pledged to introduce similar duties on auto parts in May.

The auto tariffs have left international car exporters, of which China is the largest, scrambling to tap alternative markets, while US duties on auto parts could make US-made cars for export more expensive.