Trump admin abandons $400M purchase of armored Teslas following backlash

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Trump admin abandons $400M purchase of armored Teslas following backlash

The Trump administration has walked back plans for a $400 million contract to purchase armored Tesla vehicles for the U.S. State Department. The revelation, which surfaced in a public government procurement document, ignited controversy over potential conflicts of interest, as Tesla CEO Elon Musk also serves as head of the Department of Government Efficiency (DOGE).

Initially, the document explicitly named Tesla as the recipient of the lucrative deal. However, following public outcry and media coverage, the document was quietly edited to replace the automaker’s name with the more generic term “armored electric vehicles.” The State Department now says it has no immediate plans to follow through with the contract.

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Musk’s Response and the Political Fallout

Elon Musk was quick to deny knowledge of the deal, writing on X, “I’m pretty sure Tesla isn’t getting $400M. No one mentioned it to me, at least.” Despite his denial, critics argue that his close ties to the Trump administration raise concerns about potential self-dealing, particularly as Musk’s companies, including Tesla and SpaceX, continue to receive substantial government contracts.

I’m pretty sure Tesla isn’t getting $400M. No one mentioned it to me, at least.

— Elon Musk (@elonmusk)

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The controversy comes as Musk has positioned himself as a government waste watchdog, advocating for spending cuts while securing billions in federal funding for his businesses. Ethics experts have flagged this dual role as a potential conflict of interest, questioning whether his influence over government agencies creates an uneven playing field for competitors.

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A shifting procurement landscape

While the $400 million Tesla deal is off the table for now, the procurement document still lists a requirement for armored electric vehicles, with an estimated five-year contract valued between $100 million and $500 million. Other automakers, including BMW, are reportedly set to receive contracts for armored SUVs, albeit at significantly lower amounts.

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Tesla co-founder and CEO Elon Musk unveils the all-electric battery-powered Tesla’s Cybertruck at Tesla Design Center in Hawthorne, California, on November 21, 2019.FREDERIC J&*******; BROWN/AFP via Getty Images

The situation underscores broader concerns about how federal contracts are awarded and the transparency of the process. It also highlights the selective nature of the Trump administration’s approach to combating government corruption, with critics accusing the president of shielding allies like Musk from scrutiny while scaling back spending elsewhere.

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A process halted

A State Department spokesperson said Thursday that the Tesla contract began under the Biden administration as an effort to gauge private sector interest in producing armored electric vehicles.

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In an aerial view, brand new Tesla cars sit in a parking lot at the Tesla factory on October 19, 2022 in Fremont, California.Justin Sullivan/Getty Images

At the time, Tesla was the only company to respond to the department’s request. The next step would typically involve an official solicitation, allowing multiple manufacturers to compete for the contract. However, the spokesperson confirmed that this process is now on hold.

Final thoughts

With the contract officially shelved, it remains unclear whether the State Department will reissue a solicitation for armored EVs or whether Tesla will still be in the running for a future deal. Regardless, the episode has intensified scrutiny of Musk’s role in government and whether his influence extends beyond what is ethically appropriate.

For now, Tesla Cybertrucks will not be rolling into the State Department’s fleet—but the controversy over Musk’s government dealings is far from over.

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