U.S. State Department walks back purported $400M Tesla contract

The U.S. State Department backtracked Thursday on a document saying it would award $400 million for electric armored cars by Tesla, whose chief Elon Musk has been aggressively slashing government spending on behalf of President Donald Trump.

Despite the denial, the share price of Tesla, the main source of the fortune of the world's richest person Musk, was up more than four percent in morning trade, outpacing the broader market.

A State Department forecast on procurements, published regularly for years as part of transparency efforts, said it expected to buy the Tesla armored vehicles over five years for use by U.S. embassies.

After several media outlets reported on a Tesla contract, the language on the online document was altered to read simply "armored electric vehicles" without specifying the automaker.

The State Department said the mention of Tesla was in error as it had been the only company that had responded to an initial public message to solicit interest, which takes place before the actual bid.

"No government contract has been awarded to Tesla or any other vehicle manufacturer to produce armored electric vehicles for the Department of State," a department spokesperson said.

"The solicitation is on hold and there are no current plans to issue it."

Musk also walked back on Tesla winning the contract, or at least all of it, writing on X, the social media platform he owns: "I'm pretty sure Tesla isn't getting $400M. No one mentioned it to me, at least."

The push for electric vehicles, including for the U.S. government, was initiated under former president Joe Biden, with the original document indicating a purchase from Tesla dating from December.

Despite his friendship with Musk, Trump has vowed to roll back Biden's efforts to transition to electric cars and his other initiatives to fight climate change.

Musk has been aggressively seeking to scale down spending as head of the new Department of Government Efficiency, including by putting on leave virtually the whole staff of the U.S. agency in charge of international aid.

© Agence France-Presse