• Rift opened in 2018 during Musk bid to take Tesla private

• Saudi Arabia's PIF invested in EV startup Lucid after rift

• Kingdom is the Gulf region's largest market

• Feud started easing after Trump elected

(Reuters) - Tesla will start sales in Saudi Arabia next month, the electric carmaker said on its website, signalling CEO Elon Musk and the kingdom have healed a rift that dates back to the billionaire's short-lived bid in 2018 to take the company private.

Tesla trades in other Middle Eastern countries, but not in Saudi Arabia, the Gulf region's largest market.

The dispute started when Musk tweeted in 2018 he had "funding secured" to take Tesla private after meeting Saudi Arabia's sovereign wealth fund, the Public Investment Fund.

That tweet eventually led to a lawsuit from investors when a bid failed to materialise, during which tense text messages between Musk and PIF head Yasir al-Rumayyan were made public.

Tensions have eased since the autumn when Musk took a high-profile role in U.S. President Donald Trump's election campaign and then new administration.

Trump said this month he would likely make his first trip abroad to Saudi Arabia, after asking the kingdom in January to spend upwards of $1 trillion in the U.S. economy, over four years, including military purchases.

Tesla's launch event in Riyadh, scheduled for April 10, will display its EVs and products powered by solar energy, the post said.

"Experience the future of autonomous driving with Cybercab, and meet Optimus, our humanoid robot, as we showcase what's next in AI and robotics," it added, without saying when the products would go on sale in the kingdom.

Invitations to the event asked guests to indicate which Tesla car model they were interested in.

The launch comes as Tesla has seen EV sales slump in Europe, blamed on Musk's support for far right politicians, and the brand has been targeted by protesters in the United States over his spearheading of sweeping cuts to the federal government.

In Saudi Arabia, EV sales have been slow, with a 2024 report from consultants PwC putting them at just 1% of all car sales.

A month after the feud with Musk went public, the PIF announced a $1 billion-plus investment in Lucid, becoming the majority investor in one of the EV startups looking to challenge Tesla.

The $925 billion PIF has also invested in a domestic EV brand that is yet to launch called Ceer.

Yet large gas guzzling vehicles remain the norm on Saudi roads where fuel is cheap and EV charging infrastructure remains a rarity, making traversing its long desert roads almost impossible in an EV.

WARMING TIES

In one of the first signs of improving relations, Musk appeared alongside Rumayyan and Trump in ringside seats at a UFC mixed-martial arts match in New York in November.

A few weeks earlier, Musk had made a surprise appearance at Riyadh's Future Investment Initiative summit via video link.

A U.S. jury found in 2023 that Musk was not liable for misleading investors when he tweeted funding was secured to take Tesla private.

Musk testified it was the PIF that had wanted to take Tesla private when he posted that tweet, and a series of tense text messages between him and Rumayyan emerged during the case.

"You are throwing me under the bus," Musk wrote in a text to Rumayyan, according to court documents.

Tesla's sales in Europe are down 42.6% so far this year, data showed on Tuesday, even as demand for EVs rises.

Activists across the U.S. have staged so-called "Tesla Takedown" demonstrations over Musk's role leading the Department of Government Efficiency, which has cut thousands of jobs, frozen foreign aid and cancelled thousands of programmes and contracts.