Tesla Backtracking on Saudi Arabia Decision amid Falling Sales
Back in 2018, Tesla (TSLA) CEO Elon Musk decided not to sell his electric cars in Saudi Arabia, but now he has changed his mind as the company’s sales figures are plummeting.
The Sovereign Investment Fund of Saudi Arabia sharply disagreed with Musk over how Tesla cars should be sold in the country a few years ago, and that led to Musk withdrawing his plans to sell Tesla vehicles in the country. Now years later, as Tesla sales are down 70% in Germany and the USA, Tesla needs another outlet for its sales. Musk is looking to take those unsold vehicles and try to sell them in new markets like Saudi Arabia.
Musk simply could not reach an agreement with the Saudi government in 2018, even though funding had been secured to take the company private there. He may regret burning any bridges with the government now, since he needs a major new market like Saudi Arabia for Tesla to start regaining some of its lost sales numbers.
Stock Price Drop for Tesla
Wednesday’s stock market prices were down, with Tesla emerging as one of the biggest losers. The company’s stock dropped more than 5% on Wednesday, but in premarket trading for Thursday, the stock climbed slightly, by 0.44%.
Tesla is experiencing a sales crisis, with record numbers of vehicles being traded in, flooding the secondhand market with electric cars. This is the result of numerous protests around the world (but specifically Europe) against Musk’s political affiliation and layoffs for the company. Many protesters have taken to keying Tesla cars they encounter, and some have even attempted to destroy the cars as an act of political dissent.
Tesla stock may continue to fall as public opinion rises against the company and its CEO. Musk may have to swallow his pride and try to make nice with Saudi Arabia’s government as a way to boost flagging sales.
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