State Department halts $400M armored vehicle purchase from Tesla
Shreedhar Rathi | Feb 14, 2025, 08:32 IST
( Image credit : AP )
The State Department has paused a $400 million deal with Tesla to purchase armored electric vehicles amid scrutiny from the Trump administration. Originally initiated by the Biden administration, the contract aimed to support diplomatic missions worldwide but remains unsigned. Tesla, having previously secured significant government funding, is now listed generically as an 'electric vehicle manufacturer.'
The State Department has paused discussions with Elon Musk’s Tesla over a potential $400 million purchase of armored electric vehicles, following scrutiny from the Trump administration.
A State Department spokesperson confirmed that Tesla was the only company to express interest in the deal when the Biden administration initiated talks in May 2024. At the time, officials were exploring suppliers for a fleet of armored electric vehicles to support diplomatic missions worldwide.
Had the contract moved forward, it would have been one of the department’s largest purchases of the year. Tesla, like Musk’s other ventures, has secured significant government funding, with SpaceX receiving nearly $20 billion in federal contracts since 2008 and Tesla itself collecting $41.9 million from the U.S. government, including payments for vehicles already provided to U.S. embassies.
Despite initial planning, no formal contract had been awarded to Tesla or any other manufacturer, the State Department clarified. The agency had been preparing to issue an official request for bids in May 2025, but those plans have now been shelved indefinitely under the Trump administration.
Following reports about the potential Tesla deal, the State Department quietly revised its contract forecast late Wednesday, replacing Tesla’s name with a generic listing for an “electric vehicle manufacturer.” However, other planned purchases, including a separate entry naming German automaker BMW, remain unchanged.
A State Department spokesperson confirmed that Tesla was the only company to express interest in the deal when the Biden administration initiated talks in May 2024. At the time, officials were exploring suppliers for a fleet of armored electric vehicles to support diplomatic missions worldwide.
Had the contract moved forward, it would have been one of the department’s largest purchases of the year. Tesla, like Musk’s other ventures, has secured significant government funding, with SpaceX receiving nearly $20 billion in federal contracts since 2008 and Tesla itself collecting $41.9 million from the U.S. government, including payments for vehicles already provided to U.S. embassies.
Despite initial planning, no formal contract had been awarded to Tesla or any other manufacturer, the State Department clarified. The agency had been preparing to issue an official request for bids in May 2025, but those plans have now been shelved indefinitely under the Trump administration.
Following reports about the potential Tesla deal, the State Department quietly revised its contract forecast late Wednesday, replacing Tesla’s name with a generic listing for an “electric vehicle manufacturer.” However, other planned purchases, including a separate entry naming German automaker BMW, remain unchanged.