Tesla’s $400m government deal disappears as contract gets pulled

A $400 million plan to buy electric vehicles (EVs) for the U.S. government has been scrapped, dashing hopes that Tesla had secured a major contract.

The deal, initially outlined in a federal contract document for fiscal year 2025, listed Tesla as a supplier, fueling speculation about an order for armored Cybertrucks. But by February 12, the document was quietly revised, removing all mentions of Tesla. The State Department later clarified that there was never a finalized contract, calling Tesla’s inclusion an “administrative error.”

Elon Musk, Tesla’s CEO, seemed caught off guard. “I’m pretty sure Tesla isn’t getting $400M. No one mentioned it to me, at least,” he wrote on X (formerly Twitter). Meanwhile, the abrupt reversal raises broader questions about the U.S. government’s commitment to electrifying its fleet.

The contract that never was

Government contracts follow a strict process: companies express interest, proposals are reviewed, and contracts are awarded. Tesla was the only automaker to formally engage in early discussions about an armored EV order. The initial document even included a line item for “Armoured Tesla (Production Units)” valued between $100 million and $500 million.

Yet, no formal solicitation was ever issued. Without a competitive bidding process or final approval, Tesla’s supposed deal evaporated before it could take shape. The State Department’s clarification suggests the listing was a preliminary step rather than an actual agreement.

What’s next for government EV adoption?

Tesla wasn’t the only automaker listed. BMW was reportedly in talks to supply armored X5 and X7 SUVs in a separate deal worth up to $50 million. Other unspecified armored EVs were also mentioned.

The confusion underscores uncertainty in the U.S. government’s EV transition. President Biden’s 2021 executive order pushed for federal agencies to electrify their fleets. But this $400 million reversal suggests that even ambitious policies face roadblocks.

For now, Tesla remains in the headlines—not for landing a major contract, but for one that never existed in the first place.

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