Elon Musk’s Political Party Bid Sends Tesla Shares Tumbling, Draws Trump’s Rebuke

Tesla’s stock experienced a significant downturn in premarket trading, dropping 7% following CEO Elon Musk’s weekend announcement of his intention to launch a new political entity, the ‘America Party.’ Musk stated the party would strategically target a limited number of Senate and House seats, aiming to become a decisive voting bloc on contentious legislation.

This latest political foray by the billionaire has reignited concerns among investors already grappling with Tesla’s recent performance. Dan Ives, global head of technology research at Wedbush Securities, noted investors’ growing ‘exhaustion’ with Musk’s deepening political involvement during a critical period for the electric vehicle giant. Ives highlighted that while Musk’s core supporters might back him, the broader investor base views this direction as counterproductive.

The move has also drawn sharp criticism from former President Donald Trump, who on Sunday labeled Musk’s party formation ‘ridiculous’ and declared the Tesla boss had gone ‘completely off the rails.’ This comes amidst existing policy clashes between the two prominent figures.

Adding to investor anxieties, Tesla recently reported a 14% year-on-year decline in car deliveries for the second quarter, missing market expectations, and continues to face intensifying competition, particularly in the crucial Chinese market.

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