The US State Department reversed its stance on Thursday regarding a document stating it would allocate $400 million for electric armored vehicles from Tesla, whose CEO, Elon Musk, has been actively advocating for reduced government spending on behalf of President Donald Trump.
Despite Musk's denial, the share price of Tesla, the primary source of the world's richest person's wealth, rose more than four percent in morning trading, significantly outperforming the broader market.
The US State Department has published a forecast on procurement for years as part of its transparency efforts, stating that it plans to purchase Tesla armored vehicles over a five-year period for use by US embassies.
After several media outlets covered a Tesla contract, the language on the online document was changed to read only "armored electric vehicles" without mentioning the automaker.
The State Department stated that the mention of Tesla was incorrect, as it was the only company that had responded to an initial public announcement to gauge interest before the actual bidding process began.
"No government contract has been awarded to Tesla or any other vehicle manufacturer to produce electric vehicles for the Department of State," a department spokesperson stated.
The solicitation has been put on hold and there are no current plans to release 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 $400 million. No one mentioned it to me, at least."
The push for electric vehicles, initiated by former US President Joe Biden, was outlined in a document dating back to December, with a purchase from Tesla being mentioned.
Despite his close friendship with Musk, Trump has promised to reverse Biden's efforts to shift to electric vehicles and his other measures to combat climate change.
Musk has been aggressively seeking to reduce expenses as the head of the newly formed Department of Government Efficiency, including by placing most of the staff of the US agency responsible for international aid on unpaid leave.