March 27, 2025 – Tesla Inc. (NASDAQ: TSLA) is set to make its official debut in Saudi Arabia, entering the Gulf region’s largest economy despite facing a decline in global sales and intensifying controversies surrounding CEO Elon Musk. The EV maker announced that it will host a launch event in the kingdom on April 10, where it will showcase its electric vehicles (EVs) and offer attendees a glimpse into its AI and robotics innovations.
The event will feature Cybercab, Tesla’s autonomous driving technology, and introduce Optimus, the company’s humanoid robot, as part of a demonstration of its expanding presence in artificial intelligence and automation.
However, Tesla’s entry into oil-rich Saudi Arabia comes at a challenging time for the automaker, with flagging sales, increased competition, and controversy around Musk’s political role weighing heavily on its stock performance.
Saudi Market: New Territory, Big Challenges
Saudi Arabia, known for its vast oil reserves, is still in the early stages of embracing EV adoption. According to a PwC report from September 2024, EVs accounted for just 1% of total vehicle sales in the country, presenting a tough market for Tesla to crack.
The company will face stiff competition from Chinese EV makers like BYD, which are rapidly expanding into international markets with more affordable models. Additionally, luxury automakers like Lucid Motors and Mercedes-Benz are also vying for market share with premium EV offerings in the region.
Tesla will need to differentiate itself with cutting-edge technology and strong local partnerships if it hopes to gain a foothold in Saudi Arabia’s emerging EV market.
Global Sales Decline and Mounting Competition
Tesla’s expansion into Saudi Arabia comes at a time when the company is grappling with its first-ever annual decline in sales. In 2024, Tesla reported a 1% drop in deliveries, marking a historic setback for the company since it went public.
Meanwhile, Chinese EV giant BYD has emerged as Tesla’s most formidable competitor. In 2024, BYD generated $107 billion in revenue, surpassing Tesla’s $98 billion. The Chinese company recently introduced an ultra-fast charging system capable of adding 250 miles of range in just five minutes, far outpacing Tesla’s Supercharger network, which takes 15 minutes to provide 200 miles of range.
In Europe, Tesla is also struggling. The company recorded a 40% drop in sales on the continent in February 2025 compared to the same month in 2024, according to the European Automobile Manufacturers’ Association.
Political Controversy and Tesla’s U.S. Woes
In its home market of the United States, Tesla is facing growing public backlash due to Musk’s contentious role in the U.S. government. As head of the Department of Government Efficiency, Musk has spearheaded mass layoffs in the public sector, a move that has alienated many potential Tesla buyers.
The backlash has resulted in a wave of vandalism against Tesla showrooms, charging stations, and vehicles across the country. The FBI recently formed a task force to address the surge in attacks targeting Tesla properties.
Protests have also erupted at several Tesla locations, with demonstrators holding signs reading “Elon Musk has got to go”, calling for his resignation from government duties. The negative publicity has contributed to declining sales and falling brand sentiment in the U.S. market.
Stock Woes: Tesla Shares in Freefall
The combination of slumping sales, market competition, and political controversies has spooked investors. Tesla’s stock has plummeted 40% since hitting an all-time high in December 2024, erasing billions in market value.
Investor confidence continues to waver as Musk’s dual leadership roles—in government and at Tesla—raise concerns over the company’s direction and stability. The recent decline in used Tesla prices, despite rising demand for pre-owned EVs, reflects waning consumer confidence in the brand.
Can Tesla Turn It Around?
While entering Saudi Arabia offers Tesla an opportunity to expand into a lucrative new market, the company faces an uphill battle. Its lagging sales, growing competition, and CEO controversies could hamper its success in the region.
To regain momentum, Tesla will need to deliver innovative products, expand its AI and robotics capabilities, and distance itself from the political drama surrounding Musk. The April 10 event will serve as a critical test for Tesla’s ability to reignite interest and drive sales growth.
As the EV market continues to evolve, Tesla’s success in Saudi Arabia may ultimately hinge on its ability to execute its autonomous driving vision, outpace competitors, and rebuild its global reputation.
