Topline
The State Department removed mention this week of Elon Musk’s Tesla in a potential $400 million contract to buy armored Cybertruck vehicles, and though the billionaire denied the federal government planned to spend that much on his electric vehicles and the State Department says the inquiry was made before President Donald Trump took office, it comes as questions swirl about conflicts of interest involving Musk’s high-profile White House role and his expansive private company portfolio.
Key Facts
The State Department’s procurement forecast for the 2025 fiscal year included $400 million for “Armored Tesla” cars, the independent publication Drop Site News first reported late Wednesday, but the document was edited at 9:12 p.m. EST to reflect $400 million simply for “armored electric vehicles,” according to NPR.
That possible armored EVs contract, which would presumably go toward Tesla’s stainless steel Cybertruck model, is the most expensive line on the 320-item forecast, though there are other potential armored vehicle contracts listed, including $40 million toward armored BMW X5 and X7 cars.
Musk denied the reports about Tesla securing the $400 million contract, responding to a Drop Site News post with “fake news” and writing he’s “pretty sure Tesla isn’t getting $400M. No one mentioned it to me, at least.”
A State Department spokesperson told Forbes Thursday there are “no current plans” to move forward with the $400 million armored EVs contract, noting the procurement forecast “should have been a generic entry ‘electric vehicle manufacturer’” without the mention of Tesla.
The Biden administration asked the State Department last year to “explore interest from private companies to produce armored electric vehicles,” according to the spokesperson, who added the agency only “received interest” from a single company for the project.
Key Background
The State Department and Cybertruck ado comes as boundaries blur between Musk’s business empire and his powerful role as the head of the Department of Government Efficiency, or “DOGE,” agency examining all government spending. Sen. Adam Schiff, D-Calif., sent a letter Monday to the White House asking if Musk will “seek to use his new position to shield his companies from federal scrutiny.” Musk’s companies have gotten $13 billion in federal government contracts over the last five years, according to the New York Times, mostly via his private aerospace and communications firm SpaceX. But Musk, a “special government employee,” isn’t “gaining anything” from his White House position, Trump said in an interview with Fox News aired Sunday.
Tangent
The Cybertruck, which hit roads late 2023, starts at $79,990. Tesla sold about 39,000 of the futuristic cars in the U.S. in 2024, according to Cox Automotive. That makes it the most popular electric pickup truck in the country, though Cybertrucks only accounted for about 6% of all Tesla vehicles sold domestically last year. The Cybertruck’s 2019 unveiling was one of the most famous moments in Tesla history, as Musk boasted about the car’s “really tough” exterior before a metal ball broke the car’s driver side window.
Tesla Stock Whipsaws As Wall Street Examines Musk’s Politics
Tesla stock got off to a rocky start this month as multiple analysts questioned whether the company’s sales would take a hit due to consumer backlash at Musk’s partisan role, declining 19% from Jan. 31 through Tuesday. But shares have bounced back over the last two trading sessions, gaining 2.4% Wednesday and 4% by midday Thursday. Musk’s “powerful alliance with Trump clearly could alienate some consumers to move away from the Tesla brand” but these are “containable brand issues for Tesla for now that are not a major cause for concern,” Wedbush analyst Dan Ives, long one of the most optimistic analysts covering Tesla, wrote in a Wednesday note to clients.
Forbes Valuation
Musk is by far the richest person on Earth with a $391 million net worth, according to our latest estimates. His nearly 13% stake in Tesla, plus a 9% equity award pending legal appeal, is the biggest contributor to his fortune, though he also has leading stakes in his private companies SpaceX, generative artificial intelligence startup xAI and the social media site X.
Further Reading
Read More: Musk Denies Possible $400 Million Deal For Tesla Cybertrucks—Here’s What To Know