What was once seen as a high-stakes, strategic partnership to expand Tesla’s global influence has now turned into a failed venture that left both sides disappointed. Elon Musk’s attempts to secure major business in Saudi Arabia — particularly with the nation’s powerful Public Investment Fund (PIF) — have resulted in one of the most publicized breakdowns in international business relations in recent tech history.

The Big Promise: A Game-Changing Deal

In 2018, Elon Musk stunned the financial world with a tweet claiming he was considering taking Tesla private at $420 per share — and that “funding was secured.” Behind this bold move, many pointed to Saudi Arabia’s PIF as the likely source of capital. Musk had reportedly met with PIF officials and discussed the possibility of a multi-billion-dollar investment.

However, as regulatory scrutiny increased, it was revealed that no formal agreement had been reached. The claim turned out to be premature at best — and misleading at worst. Musk was later charged by the U.S. Securities and Exchange Commission (SEC), fined tens of millions of dollars, and forced to step down as Tesla’s chairman.

Trust Collapses: Saudis Feel Betrayed

The fallout severely damaged Musk’s credibility in the eyes of Saudi officials. Reports suggest that the PIF felt “used” — believing Musk had overstated their commitment to inflate Tesla’s stock value. On the other hand, Musk was reportedly frustrated that Saudi Arabia didn’t follow through on the deal.

Efforts to collaborate on a potential Tesla gigafactory in the Middle East — possibly located in Saudi Arabia — completely stalled. Sources cite deep disagreements over terms, control, and long-term vision.

Saudi Arabia Backs a Rival: Lucid Motors

Adding insult to injury, Saudi Arabia poured billions into Lucid Motors, one of Tesla’s up-and-coming electric vehicle rivals. Not only did they invest, but they also facilitated the construction of Lucid’s first factory outside the U.S., located in the King Abdullah Economic City (KAEC) in Saudi Arabia.

This move signaled a clear shift: instead of partnering with Musk, Saudi Arabia is now backing a competitor in the EV space.

Conclusion: A Costly Lesson for Elon Musk

Elon Musk’s failed venture with Saudi Arabia is more than just a financial misstep — it’s a cautionary tale of overpromising, lack of transparency, and the fragility of international trust. Despite Musk’s global influence and bold vision, not every market can be conquered with charisma and ambition alone.

As Saudi Arabia continues to build its own EV future without Tesla, this serves as a stark reminder: even the world’s most visionary leaders can miscalculate when diplomacy, business, and ego collide.