Elon Musk’s Political Play Costs Tesla Billions in Market Value
If you somehow missed the headlines over the weekend, Elon Musk has announced plans to launch his own political party in the United States , tentatively named the America Party . The move is aimed at challenging the dominance of both Democrats and Republicans — but it seems Wall Street isn’t thrilled with the idea.
According to reports from CNBC , Tesla shares fell by more than 7.13 percent on Monday following Musk’s announcement. Although the America Party is still in its infancy and hasn’t been officially registered, investors are already expressing concerns about how this new venture could affect Musk’s business priorities.
In a statement, Musk described his political ambitions as modest yet impactful: he hopes the party can win just “2 or 3 Senate seats and 8 to 10 House districts,” giving it enough influence to act as a deciding vote on controversial legislation , ideally ensuring laws reflect what he describes as “the true will of the people.”
Tensions With Trump Grow Over Key Legislation
Tensions between Musk and former President Donald Trump have also resurfaced recently due to disagreements over the newly signed $3.4 trillion “One Big, Beautiful Bill.” Musk criticized the bill for increasing national debt, while Trump praised it as a major victory.
The legislation also includes significant cuts to tax credits for electric vehicles, solar, and wind energy — a move that directly affects Tesla’s long-term growth strategy. Musk responded negatively to these changes, highlighting the potential harm to the EV industry.
Trump, on the other hand, took to TruthSocial to slam Musk, claiming the billionaire had gone “off the rails” and calling him a “train wreck.” He also pointed out that no third-party movement has ever succeeded in U.S. politics, casting doubt on the viability of Musk’s new party.
“I have been strongly opposed to [EV mandates] from the very beginning,” Trump wrote. “People are now allowed to buy whatever they want — Gasoline Powered, Hybrids, or New Technologies as they come about — No more EV Mandate.”
A Rough Patch for Tesla
This news comes at a difficult time for Tesla, which has been struggling with declining sales, shrinking profits, and growing competition in the electric vehicle market.
Over the past few months, Tesla’s stock has steadily declined, wiping out roughly $150 billion in market value last month alone. And with the release of Q1 2025 earnings, the company reported a shocking 71 percent drop in profit compared to the previous year .
While Musk remains one of the most influential figures in tech and business, his growing involvement in politics raises questions about where his focus truly lies — and whether Tesla can weather the storm ahead.