The U.S. Department of State has removed Tesla from its 2025 procurement plans for armored electric vehicles, following concerns over a potential conflict of interest. This decision comes after media reports highlighted Tesla CEO Elon Musk’s role as an advisor to President Trump. The State Department has now put the contract on hold, raising questions about future purchases.
Why Was Tesla Removed from the Contract?
The original procurement document included a $400 million contract for armored Tesla vehicles, likely the Cybertruck due to its durable stainless-steel body. However, after concerns about Musk’s dual role as a government advisor and a major contractor, the State Department amended the document. The revised version now refers to “armored electric vehicles” without mentioning Tesla.
The New York Times reported that the State Department has suspended the contract for now, stating, “The solicitation is on hold and there are no current plans to issue it.”
Elon Musk’s Government Ties Raise Concerns
Elon Musk has secured around $13 billion in federal contracts over the past five years, making him a significant government contractor. Despite this, Musk is actively working to reduce federal spending through his Department of Government Efficiency (DOGE). The original procurement forecast was published in December, after Donald Trump’s election victory but before he officially took office, adding to the controversy.
What Happens Next?
With Tesla no longer part of the contract, the State Department may consider other electric vehicle manufacturers. This could open opportunities for companies like Rivian, Lucid Motors, or even traditional automakers venturing into electric armored vehicles. However, no official announcement has been made regarding potential replacements.
Impact on Tesla and the EV Market
This decision could impact Tesla’s future government contracts, especially under increased scrutiny over Musk’s political connections. It also highlights the growing demand for armored electric vehicles, encouraging more competition in the EV market. For now, the State Department’s decision leaves the door open for other players in the industry.
FAQ
Why did the State Department remove Tesla from the contract?
Tesla was removed due to conflict-of-interest concerns involving CEO Elon Musk’s advisory role to President Trump.
What was the original Tesla contract about?
The $400 million contract was for supplying armored electric vehicles, likely Tesla’s Cybertruck.
Is the contract canceled completely?
No, the contract is currently on hold with no immediate plans to issue it.
Who might replace Tesla in the contract?
Other electric vehicle manufacturers like Rivian or Lucid Motors could be considered, though no official replacements have been announced.
How much has Elon Musk earned from government contracts?
Musk has secured approximately $13 billion in federal contracts over the last five years.