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Tesla (TSLA) is pushing higher in midday trading on Feb. 13 in the wake of rumors that the U.S. government was interested in buying $400 million worth of armored electric vehicles from the Austin-headquartered firm.
Speculation surfaced after “Armored Tesla (Production Units)” appeared as a line item on the “Department of State Procurement Forecast 2025.” While the mention of the EV maker has since been removed from the document, its shares are still up more than 4% in midday trading.
Elon Musk Denies Rumors of Armored EVs Contract
The latest version of the “Department of State Procurement Forecast 2025” only reads “Armored Electric Vehicles” without any mention of Tesla in particular. Note that the billionaire chief executive of TSLA, Elon Musk, has already said that he’s not been in talks with the U.S. government over such a contract.
Additionally, a spokesperson for the State Department has also reiterated that the administration has not proposed a contract to any EV company for armored vehicles.
Despite today’s gain, Tesla stock is down well over 15% versus its year-to-date high.
Why Is Tesla Stock Struggling in 2025?
Much of the recent weakness in Tesla shares has been related to its earnings release on Jan. 29.
The EV company came in shy of earnings estimates in its latest reported quarter as automotive revenue declined 8% on a year-over-year basis to $19.8 billion. Tesla’s operating margin also declined from 8.2% in the fourth quarter of the previous year to 6.2% in the fourth quarter of 2024.
Investors have been wary of Tesla stock lately also because its annual deliveries declined for the first time ever in 2024 amidst heightened competition from Chinese rivals, many of which have already launched more affordable electric vehicles globally.
Plus, TSLA does not pay a dividend to appear any more attractive for income investors.
Analysts Are Losing Conviction in TSLA Shares
Tesla’s ongoing challenges have pushed analysts to become more bearish. The consensus rating on this EV stock currently sits at “Hold,” with the mean target of $338 indicating further potential downside of 4% from current levels.
Analysts expect TSLA to grow its earnings by 24.51% this year, followed by an uptick to 31.50% earnings growth in 2026.
