The US State Department’s $400 Million Tesla Contract

Elon Musk’s electric car company, Tesla, was recently listed as a top contender for a $400,000,000 State Department contract for armored Tesla vehicles. This has raised concerns with those inside and outside of government, as Musk is in charge of the Department of Government Efficiency (DOGE), a commission created by President Trump in January to reduce federal spending. Musk’s other companies, SpaceX and Starlink, both have contracts with the federal government, raising concerns over potential conflicts of interest. 

A document outlining the anticipated contracts of the federal government was first published in December 2025, where the potential contract for “Armored Tesla” was first discovered. This was later edited to remove the mention of Tesla and replaced it with “Armored Electric Vehicle.” The State Department has also stated that no contract has been awarded to Tesla or any other vehicle manufacturer to produce armored electric vehicles.

After the plans to award the $400 million contract to Tesla surfaced, the Trump administration put the plans on hold. The contract would have been the largest of the year if it were executed as planned. Under the Biden administration, when the contract began, the department was asked to “explore interest in private companies to produce electric vehicles.”  During the transition between the Biden and Trump administrations, the contract was still in the planning phase and no armored Teslas had been purchased. The State Department later stated that the contract would not be fulfilled.  

Elon Musk has refuted the claims about Tesla being awarded the $400 million contract, writing, “pretty sure Tesla isn’t getting $400M. No one mentioned it to me, at least.” and calling the reports “fake news” on X.

Senator Richard Blumenthal (D-CT) demanded answers from Secretary of State Marco Rubio, writing “Mr. Musk's dual roles pose conflicts of interest so obvious that they hardly require explanation…throughout the government are not being adequately managed and are increasing by the minute.”  Blumenthal later said that Tesla Cybertrucks had issued six recalls in 2024 alone over the delay of the rearview camera image, windshield wiper failure, and, most recently, the potential to lose drive power. 

Musk’s position within the government prompts questions of potential conflicts of interest, as the Trump administration halted a discrimination probe into Tesla by ending a watchdog agency, the Office of Federal Contract Compliance Programs under the Department of Labor. President Trump’s favorability towards Musk and Tesla raises concerns as Musk’s other companies have been awarded millions of dollars in federal contracts.

Through government contracts, Musk’s net worth has grown by tens of billions of dollars. However, Musk’s relationship with the federal government is not one-sided, as agencies such as the National Aeronautics and Space Administration (NASA) have relied on contracts with SpaceX for vital flights to the International Space Station (ISS) and created an interdependency between Musk and the federal government. 

Although Tesla is no longer being considered for a government contract, worries have been raised over the close relationship between Musk and his businesses and his close personal relationship with both the president and the federal government. However, it is too early to tell how the relationship between Musk and the federal government will develop. Musk’s role in DOGE could tarnish his credibility as the conflicting interests between himself, his companies, and the federal government as his connections have the potential to boost his personal wealth. The contract with Tesla, a company owned by a federal government employee, brings fear that DOGE is being used by Musk to personally aid himself and his business ventures.