Elon Musk, chief executive of Tesla, has clarified a controversial tweet in which he said he had secured the funding to take the electric vehicle (EV) manufacturer private.
Musk has disclosed that following a meeting with the sovereign wealth fund of Saudi Arabia, he became convinced that a deal could be done, although it is not yet final.
The Public Investment Fund of Saudi Arabia manages assets worth more than US$230 billion, mostly in the form of stakes in large Saudi companies. Following the sale of Saudi Basic Industries to oil producer Aramco, which could still take some months to finalise, the fund will have around US$70 for new investment opportunities, such as a possible deal with Tesla.
While it may seem counter intuitive for a major oil producer to invest in technology that will reduce the demand for oil, Crown Prince Mohammed bin Salman, who controls the sovereign wealth fund, is keen to diversify the country’s economy through his Vision 2030 plan.
It is also doubtful that EV technology will substantially reduce oil demand according to oil giant ExxonMobil, which also makes high quality lubricants for Mobil stockists. Speaking in 2017 during a conference call with analysts, Jeff Woodbury, a vice president with the company, claimed the limited size of the EV fleet by 2040 will not substantially reduce demand. He added that the company would also be fine if the demand for petrol fuel were to completely evaporate, because it would simply upgrade the feedstock to more profitable applications like diesel instead.