State Department Removes Tesla From $400 Million Contract Amid Musk Conflict of Interest Concerns

Elon Musk, chief executive officer of Tesla Inc., in the Oval Office of the White House in Washington, DC, U.S. on Feb. 11, 2025.

The State Department’s December 2025 procurement forecast initially included a $400 million purchase of “Armored Teslas.” However, following concerns about potential conflicts of interest involving Tesla CEO Elon Musk, the document was revised. The updated version replaces “Armored Tesla” with “Armored Electric Vehicles.”

As of late Wednesday, both the original and revised forecasts were accessible on different State Department websites. The original, mentioning Tesla, lists the procurement under NAICS Code 311999 (miscellaneous food manufacturing). The revised forecast, modified on February 12th at 9:12 p.m., uses NAICS Code 561613 (Armored Car Services). No other alterations were made to the 319-item document.

The State Department states that these annual procurement forecasts comply with the Business Opportunity Development Reform Act of 1988, aiming to provide small businesses with contracting opportunities. This aims to give “small businesses, small disadvantaged businesses, women-owned small businesses, HUBZone small businesses, and service-disabled veteran-owned small businesses” a chance to bid on government contracts or subcontracts.

TIME has contacted the State Department and Tesla for comment regarding the change and clarification on whether Tesla remains the intended recipient of the contract, slated for award on September 30th.

Musk, head of the Department of Government Efficiency (DOGE), which influences agency budgets, addressed conflict-of-interest concerns during a White House appearance. He emphasized DOGE’s transparency, pointing to its X account (a platform he also owns). He stated his expectation of scrutiny.

President Trump indicated oversight of Musk, stating that a lack of transparency or conflict of interest would prevent Musk’s involvement. However, White House Press Secretary Karoline Leavitt previously suggested the President accepts Musk’s self-regulation, stating Musk would recuse himself from contracts presenting conflicts of interest.

[Publication A] first reported Tesla’s inclusion in the State Department’s forecast, while [Publication B] initially reported on the updated version.