The name of the carmaker led by Elon Musk was removed from a list of planned purchases after news outlets raised conflict-of-interest concerns.
The department plans to buy armored Tesla vehicles. Elon Musk, who is leading efforts to cut government spending, has won more than $13 billion in government contracts in the past five years.
The executive, Jim Farley, said President Trump’s tariff and auto policies would raise costs and could force the automaker to cut jobs.
The company’s board pledged to investors that it would pay closer attention to how the company managed workers.
States are using higher registration fees for electric cars to make up for declining fuel taxes, but some are punitive, environmentalists say. A federal tax could be coming.
Automakers and even some Republicans may fight to preserve funds, and environmental activists will likely sue, but some experts said that some changes may not survive legal challenges.
More car buyers are expected to eventually pick battery-powered cars and trucks as prices fall and technology improves, even if Biden-era incentives disappear.
The electric-car company led by Elon Musk no longer has the market to itself. Investors are focusing on autonomous driving and other new technologies.
Sales of the company’s cars are flagging, but investors are focusing on the potential of autonomous driving and Mr. Musk’s ties to President-elect Donald J. Trump.