Tesla shares fell sharply in early trading Monday after CEO Elon Musk said he will launch a new political party — renewing investor concerns after the mogul’s dustup with President Donald Trump.
Over the weekend, Musk touted plans for the “America Party” and suggested it could concentrate “on just 2 or 3 Senate seats and 8 to 10 House districts.”
He added this would be “enough to serve as the deciding vote on contentious laws, ensuring that they serve the true will of the people.”
Tesla stock, which has been battered by Musk’s close ties and subsequent fallout with Trump, was down 6.4% in premarket trade.
Musk’s latest moves marks a reentry into politics just months after resigning from his role as the de facto head of the the Department of Government Efficiency, or DOGE, a Trump-backed initiative.
His departure from DOGE had buoyed Tesla’s stock but the new political ambitions have rattled even his biggest supporters.
“Very simply Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story,” Tesla hawk Dan Ives, global head of technology research at Wedbush Securities, wrote in a note Sunday.
“While the core Musk supporters will back Musk at every turn no matter what, there is broader sense of exhaustion from many Tesla investors that Musk keeps heading down the political track.”
The Post has sought comment from Tesla.
Tesla’s stock has experienced major fluctuations since the Nov. 5 presidential election.
The stock closed at $251.44 on Election Day — then surged by more than 90%, reaching an all-time closing high of $479.86 on Dec. 17. Since that peak, shares declined approximately 34%, closing at $315.35 on Thursday. Markets were closed Friday in observance of the Fourth of July holiday.
The post-election rally was fueled by investor optimism around the incoming Trump administration and Tesla’s growth outlook, but momentum was later dampened by missed delivery targets, rising competition and Musk’s political involvement.
His alliance with Trump fractured in recent months over policy disagreements. Musk became an outspoken critic of Trump’s major spending bill — dubbed the “Big, Beautiful Bill” — calling it a “disgusting abomination” due to its projected impact on the federal deficit and cuts to electric vehicle incentives.
Trump, in turn, accused Musk of being ungrateful and threatened to end government contracts with Musk’s companies.
The feud escalated on Sunday, when Trump responded to Musk’s announcement of the America Party by calling it “ridiculous” and saying Musk had gone “completely off the rails.”
“I think it’s ridiculous to start a third party,” he told reporters before boarding Air Force One in Morristown, NJ.
“Starting a third party just adds to confusion. It really seems to have been developed for two parties. Third parties have never worked, so he can have fun with it, but I think it’s ridiculous.”
Shortly afterward, Trump doubled down on Truth Social, writing: “I am saddened to watch Elon Musk go completely ‘off the rails,’ essentially becoming a TRAIN WRECK over the past five weeks.”
Musk’s push to form a third party was inspired in part by a user poll he posted on X, formerly Twitter, where a majority backed the idea.
In his announcement, Musk said the America Party aimed to “give you back your freedom” and push back against what he called a “one-party system” filled with “waste and graft.”
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While the party has not yet completed the legal steps to become a registered political entity, Musk has said its strategy would involve targeting a small number of congressional seats to exert disproportionate influence.
He cited historical military strategy as inspiration for focusing efforts where they can make the most impact.
The political drama is unfolding at a time when Tesla is already under pressure. The company recently reported a 14% year-over-year drop in vehicle deliveries for the second quarter, missing Wall Street expectations.
Tesla is also facing intensifying competition in key markets, especially China.
Musk’s political ambitions appear to be complicating Tesla’s narrative at a time when investors are seeking stability.
His announcement drew sharp responses from prominent MAGA figures.
Laura Loomer, a well-known right-wing influencer with close ties to Trump, warned that Musk’s third-party push could fracture the Republican base.
“I predict Tucker Carlson, Marjorie Taylor Greene and Thomas Massie will join the new ‘America Party’ to spite President Trump,” Loomer posted on X.
Raheem Kassam, a former adviser to Nigel Farage and influential voice in MAGA circles, threatened to abandon Musk’s platform if it began suppressing pro-Trump voices.
“If Musk weaponises X against Maga, I’m leaving this account as an automated news feed and shifting to TruthSocial tbh (to be honest),” Kassam wrote.
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