Musk’s feud with Trump spooks Tesla investors and drags stock down
Elon Musk has once again blurred the lines between politics and business, and Tesla investors are already reacting. The billionaire’s push to create his political movement has sparked market concerns, according to Reuters.
On Monday, July 7, Tesla shares dropped more than 3% in pre-market trading after Musk announced the formation of a new political party in the US.
The move has intensified investor fears over whether Musk can remain focused on leading the company.
The drop in Tesla’s stock was also recorded in Frankfurt, continuing a negative trend following the three-day US Independence Day holiday weekend.
Wedbush analyst Dan Ives noted that Musk is Tesla’s greatest asset, and his deepening involvement in politics could pose additional risks for the company.
Ives commented that Tesla needs Musk as CEO and its biggest asset, not as a political firebrand. He added that they wouldn't be surprised if, at some point, the board of directors tried to step in, depending on how far Musk went.
Musk’s political party
On July 5, Elon Musk announced the creation of his own political party, which he named the American Party. He stated that his political force would serve as an opposition to Donald Trump’s Republican Party.
The formation of the party was a response to the passage of the sweeping Big Beautiful Bill, which Musk described as debt slavery.
The party positions itself as an alternative to the US two-party system and aims to give a voice to nearly 80% of centrists who, according to its founders, feel unrepresented by either the Democrats or the Republicans.
US President Donald Trump has already reacted, calling Musk’s idea of forming the American Party ridiculous. He said the move appears utterly pointless and will have no serious impact on American politics.
