Elon Musk’s bitter rift with the Saudi authorities stemmed from his reluctance to construct a Tesla plant within the oil-rich kingdom — a sticking level for Crown Prince Mohammed bin Salman, in response to sources and beforehand unreported textual content messages made public in a California lawsuit.
Throughout negotiations with Musk to probably take Tesla personal in 2018, the Saudi Public Funding Fund seen a dedication to construct a Tesla manufacturing facility in Saudi Arabia as a key element of any deal, sources near the scenario advised The Publish.
The Saudis had been hoping to announce a deal to take Tesla personal on the similar time Tesla revealed plans for a Saudi Arabian manufacturing facility, sources mentioned.
However when Musk infamously tweeted on Aug. 7, 2018 that he had “funding secured” to take Tesla private at $420 a share, sources mentioned bin Salman was shocked to search out out that the PIF’s negotiators had not but obtained a dedication from Musk to construct a Saudi Arabian plant.
Bin Salman was aggravated and the negotiations by no means received again on monitor, sources mentioned.
Along with shedding gentle on the occasions surrounding Musk’s “funding secured” tweet, which got him into trouble with the Securities and Exchange Commission, the Saudi talks present Musk’s chaotic dealmaking model as he celebrates his successful Twitter takeover 4 years later. The beforehand unreported texts, which had been made public as a part of a shareholder lawsuit in California federal courtroom, additionally present how the notoriously opaque PIF has pursued its years-long quest to safe an electrical automobile manufacturing facility.
“A Tesla manufacturing hub within the Kingdom of Saudi Arabia“
Three days after Musk claimed to have secured funding to take Tesla personal, PIF governor Yasir Al-Rumayyan despatched a textual content to Musk: “We wish to discover investing in Tesla topic to with the ability to create a Tesla manufacturing hub within the Kingdom of Saudi Arabia that serves MENA, Europe, Asia and Africa with the best incentives on all fronts (subsidies on power and land, tax exemptions, assist in acquiring financing, and many others).”
“Subsequently, as mentioned, we wish our groups to begin working collectively in a confidential method to discover a possible transaction,” Al-Rumayyan added.
Musk responded to the Aug. 10 textual content with out giving a definitive “sure” or “no” reply on the manufacturing facility situation, writing, “Thanks, that is a lot appreciated. Essential that media inquiries verify this assertion.”
However in an indication that non-committal Musk was maintaining his choices open, he texted Google co-founder and good friend Larry Web page one hour later with a smiling emoji and a query: “Wanna spend money on Tesla?”
Musk additionally explored financing choices with Goldman Sachs and Silver Lake earlier than finally shelving the plan and saying on Aug. 24 that Tesla would remain a public company.
“It takes two to tango“
Weeks of drama and hypothesis over whether or not Musk would take Tesla personal despatched the corporate’s shares haywire, subsequently resulting in an investigation from the Securities and Change Fee and the lawsuit from disgruntled shareholders that resulted in his texts with the Saudis being made public.
Musk has countered that the “funding secured” tweet was correct as a result of Al-Rumayyan advised Musk he had the non-public blessing of bin Salman to purchase Tesla. The brand new batch of textual content messages provides extra particulars on Musk’s declare.
On Aug. 12, Musk despatched an irate textual content to Al-Rumayyan after Bloomberg reported that the PIF was “exploring” taking Tesla personal.
“That is an especially weak assertion and doesn’t mirror the dialog we had at Tesla,” Musk wrote to Al-Rumayyan. “You mentioned you had been undoubtedly focused on taking Tesla personal and had needed to take action since 2016. You additionally made it clear that you simply had been the decision-maker, furthermore backed strongly by the Crown Prince, who regards this as strategically essential at a nationwide stage. I’m sorry, however we can’t work collectively.”
“It takes two to tango,” a Al-Rumayyan responded, providing to fly to California or Europe to satisfy with Musk. “We haven’t obtained any factor but.”
Musk appeared to throw chilly water on any potential assembly, telling Al-Rumayyan he deliberate to exclude the Saudis from any deal to take Tesla personal.
“Yasir, once we met at Tesla just lately, you mentioned that you simply had been the decision-maker for PIF, that you simply had needed to do the Tesla take-private deal for 2 years, and that this was supported instantly by the Crown Prince,” Musk wrote. “I cannot work with a corporation who’s public assertion to the media don’t match their personal statements to me and my staff.”
The PIF and Musk declined to remark for this story. A few of the exchanges between Musk and Al-Rumayyan had been first reported by Bloomberg on Sunday, however the conversations in regards to the Tesla plant haven’t been beforehand lined.
From Tesla to Lucid
Given the Kingdom’s present reliance on oil, the Saudis have seen an electrical automobile manufacturing facility in Saudi Arabia as each an financial and public relations precedence for years, in response to economist Omar Al-Ubaydli.
“It’s a part of Saudi Arabia’s technique to enhance innovation and technological growth inside the kingdom, which is one thing it has not been superb at traditionally,” Al-Ubaydli advised The Publish in reference to the Saudi’s electrical automobile investments.
“They’re [also] making an attempt to domesticate their picture as being inexperienced, and a part of that branding technique is to spend money on electrical automobiles,” added Al-Ubaydli, who’s the director of analysis on the Bahrain Middle for Strategic, Worldwide and Power Research.
That seems to be why the PIF shortly pivoted from Tesla to one in every of its opponents.
A few month after Musk mentioned he would not work with the Saudis, the PIF introduced it will make investments $1 billion into Lucid Motors, a California-based electrical automobile firm led by a former Tesla engineer.
Whereas the September 2018 announcement made no point out of a Lucid plant in Saudi Arabia, the deal truly included a secret requirement that Lucid construct a manufacturing facility in Saudi Arabia, the Wall Street Journal reported final yr.
Lucid’s plans for a manufacturing facility in Saudi Arabia’s King Abdullah Financial Metropolis had been formally announced this February.