by Brad Anderson
- Tesla is targeting more than 1.5 million vehicles used by US agencies.
- By comparison, it sold only about 800 EVs to public sector buyers.
- The new agreement allows an indefinite number of agency purchases.
Winning retail buyers is one thing, but institutional fleets play by a very different set of rules. Perhaps sensing it might be challenging to grow its US sales as promised, Tesla is now looking to dramatically increase the number of vehicles it sells to public agencies, a sector long dominated by General Motors and Ford.
It’s been revealed that Tesla signed a contract with Sourcewell in December, a service cooperative and government unit that simplifies procurement for public agencies, removing the need to run individual bidding processes. Both GM and Ford already hold Sourcewell contracts that extend through November 2028.
The agreement gives Tesla access to more than 50,000 potential public-sector buyers across the US and Canada, including cities, school districts, and state agencies.
Read: Tesla Got Outsold In EVs By A Company Most Americans Still Can’t Name
According to a report from Business Insider, Tesla’s agreement with Sourcewell could run for up to seven years and allows for an “indefinite quantity” of sales. In practice, that means it can supply a wide range of vehicles to public agencies, with provisions for modifications such as police lighting and wheelchair-accessible ramps.
The deal covers small cars, SUVs, vans, and light trucks, and allows third parties to carry out those modifications.
An Untapped Goldmine?
Tesla says state and local agencies across the US operate between 1.5 million and 2 million light-duty vehicles, with a sizable share expected to shift to EVs in the near term. For now, its public-sector footprint remains small, with just over 800 vehicles sold to government customers. That figure represents less than 1% of its annual sales. California leads the way, purchasing roughly 500 EVs from Tesla each year .At the other end of the scale, Maine buys about one Tesla annually.
To make the pitch more compelling, Tesla is waiving standard delivery fees for government buyers. The absence of direct fleet leasing or financing options could still complicate matters, though the company appears unfazed and expects volumes to rise following the Sourcewell deal.
“Tesla’s mission is to accelerate the world’s transition to sustainable energy,” the carmaker said. “This is an opportunity to do good for a great country.”
