- Tesla CEO Elon Musk says “no one mentioned” the generous U.S. Government contract to him. Yet Tesla was listed by name on a State Department procurement list before it was hastily expunged following a news report.
The reference to a $400 million order for bulletproof Teslas may have disappeared, but the controversy remains.
On Wednesday, a line item in the U.S. State Department procurement budget that listed the $400 million Tesla order saw the carmaker’s name stripped following a news report that CEO Elon Musk was in line to benefit from a large contract awarded by the federal government. In its stead is now a generic reference to “armored electric vehicles.”
After the name Tesla was listed in black and white in an official document, Musk issued a hedged denial that left the possibility that the story broken by independent journalist Ryan Grim of Drop Site News was true.
“I’m pretty sure Tesla isn’t getting $400M,” wrote Musk late on Wednesday. “No one mentioned it to me, at least.”
Wow. Looks like Elon Musk is on-track to win a $400,000,000 State Department contract for “Armored Tesla” in 2025.
— Sawyer Hackett (@SawyerHackett) February 12, 2025
The contract is from the “Office of Small and Disadvantaged Utilization.” Pic.twitter.com/VTLnDpaeoD
The government could still purchase Tesla vehicles without buying them directly from Musk’s company.
The State Department could, for example, purchase the vehicles from one or multiple third parties that, in turn, procure them from Tesla.
These could be, for example, specialist firms that equip cars with armored glass and extra steel plating to stop heavy caliber bullets.
A deal of this kind should not normally raise much suspicion since Teslas are among the most American cars around. All Tesla vehicles sold in the U.S. Market are built in the country, and many of their components are supplied by local auto parts manufacturers.
Tesla’s past success has allowed it to jump-start a nascent EV battery industry in North America, as well.
Musk’s factory in Austin makes the in-house 4680 cells used in the Cybertruck, while a new Tesla-owned site in nearby Corpus Christi has even begun processing the raw lithium needed for the batteries, a production step almost exclusively found in China to date.
Uncle Sam buying Tesla also benefits the American blue-collar jobs the Democrats claim to champion.
That may help explain why the line item was introduced in December, when Biden was still in office.
Musk under growing scrutiny for government spending cuts
Yet at a time when Musk is gutting the federal bureaucracy in a quest to “delete entire agencies,” the idea of pocketing such government largesse would seem antithetical to the spending hawk—not to mention out of place for notorious EV skeptic Donald Trump.
The world’s wealthiest entrepreneur has been under attack ever since he cut aid to some of the world’s poorest by working to shutter the U.S. Agency for International Development, established in 1961 by President John F. Kennedy, calling it a “criminal organization” and “evil” in the process.
Should the government contract turn out to be real, Tesla would stand to benefit handsomely.
While Tesla generates $48 billion in annual revenue in the United States, bulk sales deals with large commercial fleets have suffered ever since Musk’s pricing strategy inflicted hefty losses on customers like Hertz.
The State Department order would help reignite the demand needed after Tesla backed away from its 2025 forecast for 20% to 30% growth in vehicle sales.
