Elon Musk, the billionaire entrepreneur and CEO of Tesla, made headlines this past weekend with the announcement of his plan to launch a new political party called the “America Party,” aimed at challenging the existing Republican and Democratic parties. This development coincides with a notable drop in Tesla’s stock prices.
On Friday, Musk conducted a poll on X, the social media platform he owns, asking users whether they wanted to break away from the “two-party (some would say uniparty) system” and if the America Party should be established. This move came shortly after former President Donald Trump signed the GOP’s One Big Beautiful Bill Act (OBBBA) into law, prompting Musk’s reaction.
“When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy,” Musk stated, adding that the America Party is intended to “give you back your freedom.” The poll revealed that respondents favored the idea of a new party by a two-to-one margin.
Following the announcement, Tesla shares fell by as much as 7.7% on Monday. Investors expressed concern over Musk’s political ambitions and the possibility of rekindling his feud with Trump, particularly regarding Musk’s earlier criticisms of the OBBBA’s impact on the national deficit.
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Musk has not held back his criticism of the OBBBA, denouncing it earlier this month as a “massive, outrageous, pork-filled Congressional spending bill [that] is a disgusting abomination.” He further labeled the legislation as “utterly insane and destructive,” arguing that it favors outdated industries while undermining future-focused sectors, particularly tied to renewable energy initiatives.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 315.35 | -0.30 | -0.10% |
Musk’s initiative to establish the America Party follows a period of heightened tensions with Trump, although their feud had appeared to cool recently after Musk’s departure from the Department of Government Efficiency (DOGE).
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Trump addressed Musk’s announcement on his Truth Social platform, expressing disappointment at what he termed Musk’s descent “off the rails.” He remarked on Musk’s ambition to launch a third political party, noting that historical precedent suggests such efforts rarely succeed in the U.S. and often only lead to “Complete and Total DISRUPTION & CHAOS.”
Tesla’s stock has retreated over 22% this year, partly attributed to backlash and consumer boycotts stemming from Musk’s affiliation with the Trump administration through DOGE and the subsequent fallout regarding the OBBBA.
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Dan Ives, managing director and global head of technology research at Wedbush Securities, provided insights to investors, stating that Musk’s renewed engagement in politics comes at a challenging time for the company. He noted that this political pivot is contrary to what many Tesla investors hope for during a pivotal era for the company.
“While Musk has a solid base of supporters, there is a growing sense of fatigue among Tesla shareholders regarding his political pursuits,” Ives remarked. “Initially, after Musk departed from the Trump administration, there was a collective sigh of relief among those invested in Tesla, but this latest announcement has shifted sentiment back towards concern.”
