Tesla Chief Executive Elon Musk denies reports that the EV giant is set to receive a $400 million federal contract for armored vehicles. Mention of Tesla was removed from the U.S. State Department's 2025 procurement forecast. Meanwhile, Musk continues to focus on his work for President Donald Trump at the Department of Government Efficiency, known as DOGE. TSLA stock advanced Thursday but edged lower on Friday.
Reports late Wednesday showed the U.S. State Department's procurement forecast for 2025 included a $400 million line item titled "Armored Tesla (Production Units)." It's a five-year contract with deliveries set to begin in Q4.
The State Department claims the procurement forecast update occurred in December, making it Biden administration work and not yet under the Trump administration.
Line Item In Contract Reportedly Removed
The line item, reported by Electrek and others online, was edited to remove the mention of Tesla about six hours after it became public, to simply say "armored Electric Vehicles."
Musk, at 1:30 a.m. ET, responded to a post on X about the line item saying "I'm pretty sure Tesla isn't getting $400M."
"No one mentioned it to me, at least," Musk said.
The scrutiny of government contracts comes as Musk has started work at DOGE, and publicly decried certain spending as wasteful or fraud. Meanwhile, on Monday, reports said that Musk's SpaceX business was awarded a new $38.8 million contract. SpaceX Chief Executive Gwynne Shotwell has said the company has around $20 billion in government contracts, according to Reuters.
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Speaking to the press in the Oval Office alongside Trump on Tuesday, Musk refuted claims there could be a conflict of interest with his companies receiving federal contracts as he looks through government agencies to make cuts.
"If you see any contract where it was awarded to SpaceX and it wasn't by far the best value for the taxpayer, let me know, because everyone of them was," Musk said on Tuesday.
DOGE, Trump Alliance 'Clearly Could Alienate' Consumers
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, reiterated his 550 price target for Tesla stock and outperform rating late on Wednesday. Ives said that Tesla stock "has been under heavy pressure" to start 2025 for various reasons after a "historic run post President Trump win in November."
The analyst maintains that Musk's involvement with the Trump White House is still a positive when it comes to easing the federal path for autonomous vehicles. However, Ives added that with Musk's apparently growing influence in the Trump Administration, "there has been a visible downside impact that has weighed on Tesla shares."
"The worry of the Street is that Musk dedicating so much time (even more than we expected) to DOGE takes away from his time at Tesla in such a crucial moment and year for the company," Ives said. "Musk's DOGE related actions and more powerful alliance with Trump clearly could alienate some consumers to move away from the Tesla brand. There is some momentum around this effort in Europe and pockets of the U.S. as well since November."
Tesla Stock Performance
TSLA dropped 0.5% to 354.28 during Friday's stock market action. The stock jumped 5.8% to 355.94 on Thursday but is still slightly down on the week.
On Wednesday, the stock advanced 2.4%, snapping a five-session losing streak and it rebound from 2025 lows.
Benchmark initiated TSLA stock at a buy with a 475 price target. However, TSLA retreated somewhat as news broke that Musk plans to spend the next four months working at DOGE. He aims to cut $2 trillion from the federal budget.
Wednesday was an inside day, trading within the upper and lower limits of Tuesday's 6.3% tumble to 328.50 — its lowest price since late November. The stock sold off last week, and has now broken decisively below a recent consolidation, according to MarketSurge charts.
Tesla stock has dropped since hitting resistance on Jan. 31 at a downward-sloping trendline. Investors who bought on the Nov. 6 postelection breakout have seen the bulk of a scorching hot 200-point gain disappear — mostly since the end of January.
As a result, the relative strength line for Tesla stock is at a three-month low.
Market Rally Just Below Highs, 3 'A' Stocks Near Buy Points
Tesla stock ranks third in the 35-stock IBD Auto Manufacturers industry group. The stock has an 82 Composite Rating out of a best-possible 99. Shares also have a 95 Relative Strength Rating and an 83 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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