Elon Musk’s bitter rift with the Saudi government stemmed from his reluctance to build a Tesla plant in the oil-rich kingdom — a sticking point for Crown Prince Mohammed bin Salman, according to sources and previously unreported text messages made public in a California lawsuit.
During negotiations with Musk to potentially take Tesla private in 2018, the Saudi Public Investment Fund viewed a commitment to build a Tesla factory in Saudi Arabia as a key component of any deal, sources close to the situation told The Post.
The Saudis had been hoping to announce a deal to take Tesla private at the same time Tesla revealed plans for a Saudi Arabian factory, sources said.
But when Musk infamously tweeted on Aug. 7, 2018 that he had “funding secured” to take Tesla private at $420 a share, sources said bin Salman was surprised to find out that the PIF’s negotiators had not yet received a commitment from Musk to build a Saudi Arabian plant.
Bin Salman was annoyed and the negotiations never got back on track, sources said
In addition to shedding light on the events surrounding Musk’s “funding secured” tweet, which got him into trouble with the Securities and Exchange Commission, the Saudi talks show Musk’s chaotic dealmaking style as he celebrates his successful Twitter takeover four years later. The previously unreported texts, which were made public as part of a shareholder lawsuit in California federal court, also show how the notoriously opaque PIF has pursued its years-long quest to secure an electric vehicle factory.
A Tesla production hub in the Kingdom of Saudi Arabia
Three days after Musk claimed to have secured funding to take Tesla private, PIF governor Yasir Al-Rumayyan sent a text to Musk: “We would like to explore investing in Tesla subject to being able to create a Tesla production hub in the Kingdom of Saudi Arabia that serves MENA, Europe, Asia and Africa with the right incentives on all fronts (subsidies on energy and land, tax exemptions, support in obtaining financing, etc).”
“Therefore, as discussed, we would like our teams to start working together in a confidential manner to explore a potential transaction,” Al-Rumayyan added.
Musk responded to the Aug. 10 text without giving a definitive “yes” or “no” answer on the factory issue, writing, “Thank you, this is much appreciated. Very important that media inquiries confirm this statement.”
But in a sign that non-committal Musk was keeping his options open, he texted Google co-founder and friend Larry Page one hour later with a smiling emoji and a question: “Wanna invest in Tesla?”
Musk also explored financing options with Goldman Sachs and Silver Lake before ultimately shelving the plan and announcing on Aug. 24 that Tesla would remain a public company.