Trump admin halts $400 mn armoured Tesla purchase by US State Department

US President Donald Trump had signed executive orders to roll back EV incentives and regulations, reversing the previous administration's climate policies

A planned US State Department purchase of armoured electric vehicles from Tesla has been put on hold by the Trump administration, following reports that the deal could have been worth $400 million.

 

According to a State Department spokesperson, Tesla - owned by billionaire Elon Musk, who has become a close adviser to President Donald Trump – was the only company to express interest when the department sought potential suppliers in May 2024, under then-President Joe Biden.

 

The proposal was included in the department’s 2025 procurement forecast, a document published in December 2024, after Trump’s election victory but before he took office.

 

 

Although still in its early stages, the proposed deal was set to be one of the department’s largest contracts of the year, highlighting the substantial federal funding Tesla and Musk’s other ventures continue to receive. The plan, however, has now been shelved. The State Department confirmed that no contract had been awarded to Tesla or any other company for manufacturing armoured electric vehicles.

 

Federal contracts, Musk’s ties to the Trump admin

The move to suspend Tesla’s potential contract comes amid scrutiny of Musk’s business dealings with the US government. His space company, SpaceX, has secured nearly $20 billion in federal contracts since 2008 for Nasa missions and satellite launches. Meanwhile, Tesla has already received $41.9 million from the US government, including payments for vehicles supplied to American embassies.

 

Musk’s growing political influence has also raised concerns. Reports indicate that he spent more than $250 million to support Trump’s re-election bid. In return, Trump appointed him to lead a cost-cutting initiative within the government, known as the Department of Government Efficiency (DOGE).

 

The planned armoured EV contract was quietly removed from the State Department’s procurement database late Wednesday, ABC News reported, following media reports about the potential Tesla purchase. The department later clarified that the listing should have referred to a generic electric vehicle manufacturer rather than naming Tesla. However, another entry in the database still lists a separate BMW purchase, suggesting that some EV-related acquisitions remain on track. 

 

Trump’s executive order against EVs

The decision to halt the procurement aligns with Trump’s broader stance on electric vehicles (EVs). One of his first actions after taking office was signing executive orders to roll back EV incentives and regulations, reversing the previous administration’s climate policies.

 

By contrast, Biden had aggressively promoted EV adoption. In 2021, he signed an executive order instructing federal agencies to prioritise EV purchases, with a target of transitioning all government fleets to zero-emission vehicles by 2035. The now-scrapped armoured EV procurement was initially part of this shift towards sustainable transportation.

 

Despite the State Department’s confirmation that the project is no longer under discussion, US media reports suggest that companies will still be allowed to submit proposals for armoured electric vehicles.

 

[With agency inputs]