Tesla’s $400M Government Contract Controversy: What’s Really Going On?

Tesla’s involvement in a $400 million contract with the U.S. government has sparked political controversy—even though the deal has already been resolved.

The Backstory: Tesla’s Name on a $400M Contract

Earlier this week, reports surfaced about Tesla being listed in the U.S. Department of State’s procurement documents, suggesting that the company would win a $400 million contract to supply armored electric vehicles—potentially Cybertrucks—for government use.

However, Tesla CEO Elon Musk quickly denied any knowledge of the deal, and Tesla’s name was later removed from the official documents. With that, the issue seemed to be over.

But not everyone is ready to let it go.

Senator Blumenthal Challenges the Contract Anyway

Despite Tesla’s official removal from the contract, Senator Richard Blumenthal sent a letter to U.S. Secretary of State Marco Rubio, calling out the deal as a “conflict of interest.”

Blumenthal didn’t hold back. In a letter obtained by CBS News, he wrote:

“Mr. Musk’s dual roles pose conflicts of interest so obvious that they hardly require explanation. The State Department’s intent to purchase armored Cybertrucks suggests the conflicts of interest inherent in Mr. Musk’s installation of his cronies throughout the government are not being adequately managed and, in fact, are increasing by the minute.”

But is there any truth to these claims?

Blumenthal’s Claims vs. Reality

One of the senator’s biggest criticisms was that the Tesla Cybertruck isn’t reliable enough for government use.

He stated:

“In the 15 months since it was released, the Cybertruck has been widely derided and subject to at least six separate recalls. Indeed, Tesla has reportedly had ‘disastrous’ sales numbers for the Cybertruck. It hardly seems like the type of reliable vehicle the State Department would choose for this contract absent a heavy thumb on the scale.”

But let’s break this down:

• Most of the Cybertruck recalls were software-related and fixed with Over-the-Air (OTA) updates—no service center visits needed.
• The Cybertruck was the best-selling electric pickup in the U.S. in 2024, outperforming the Ford F-150 Lightning, according to Cox Automotive.
• It was also the fifth-best-selling EV overall in the U.S. last year.

So, is the Cybertruck really a “disaster”? The numbers say otherwise.

What’s Next?

Despite Tesla’s removal from the contract and Musk’s lack of involvement, Blumenthal still wants answers from Secretary of State Marco Rubio. He has requested a response by February 21.

Will this controversy fade away, or is there more political drama ahead? Stay tuned.