Tesla's $400 Million Armored Cybertruck Deal Under Fire As Short Seller Jim Chanos Questions Elon Musk's DOGE Role In Cutting 'Wasteful Government Spending'
Prominent short-seller Jim Chanos called into question a potential $400 million government contract for Tesla Inc.’s (NASDAQ:TSLA) armored Cybertrucks on Wednesday, linking it to CEO Elon Musk’s recent appointment to lead government efficiency initiatives.
What Happened: “While we’re looking for wasteful government spending DOGE, how about we start with the recent $400M contract with Tesla for armored Cybertrucks…?! Are they really necessary?” Chanos wrote on X, referring to the Department of Government Efficiency (DOGE) program.
The criticism comes as a Department of State procurement forecast for fiscal year 2025 lists a five-year, $400 million requirement for “Armored Electric Vehicles,” though it doesn’t specifically name Tesla’s Cybertruck.
The timing is notable as Musk has strengthened ties with President Donald Trump, with a Cybertruck appearing in Trump’s motorcade during a recent visit to SpaceX’s Starbase facility in Texas. The vehicle’s inclusion in the presidential convoy sparked speculation about potential government contracts.
Why It Matters: Tesla has claimed the Cybertruck features “ultra-hard 30X cold-rolled stainless-steel body panels” and “armor glass” windows, though the effectiveness of these materials in withstanding gunfire remains unproven. During the vehicle’s initial presentation, a demonstration of the armor glass’s durability failed to meet expectations.
Wedbush Securities analyst Dan Ives, maintaining a $550 price target for Tesla, addressed broader concerns about Musk’s government role. “The worry of the Street around Tesla is Musk dedicating so much time to DOGE takes away from TSLA and causes brand deterioration,” Ives said, though he believes these concerns are overstated.
Tesla’s stock has declined 20.64% since Jan. 21 after Trump’s inauguration, with some analysts attributing the drop to Musk’s divided attention between Tesla and his new government efficiency role. According to FOX Business, Musk plans to dedicate the next four months to DOGE initiatives, including ambitious plans to cut $2 trillion from the budget.
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