Tesla shares slide after Musk announces new political move
Billionaire Elon Musk over the weekend announced that he's launching a new "America Party" to challenge the Republican and Democratic parties – though his latest foray into politics has Tesla shares sliding.
Musk on Friday posted a viral poll on X, the social media platform he owns, that asked users if they "want independence from the two-party (some would say uniparty) system" and if the America Party should be created. The poll came in response to President Donald Trump signing the GOP's One Big Beautiful Bill Act (OBBBA) into law.
"When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy," Musk wrote, adding that the America Party will be formed to "give you back your freedom" after respondents were in favor of the idea by a two-to-one margin.
Tesla shares dipped as much 7.7% on Monday after markets opened as investors balked at Musk's latest move into politics and a potential revival of his feud with Trump over the bill, which Musk criticized over its deficit impact.
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Musk repeatedly criticized the OBBBA, saying in early June that it's a "massive, outrageous, pork-filled Congressional spending bill [that] is a disgusting abomination."
He continued to criticize the legislation, calling it "utterly insane and destructive" because it "gives handouts to industries of the past while severely damaging industries of the future," in reference to changes to renewable energy tax credits and subsidies.
Musk's move to create the America Party to defy Republicans and Democrats comes as his feud with Trump had subsided in recent weeks after it intensified following the end of his tenure leading the Department of Government Efficiency (DOGE).
Trump responded to Musk's post about the creation of the America Party in a post on his Truth Social website, writing he is "saddened to watch Elon Musk go completely 'off the rails,' essentially becoming a TRAIN WRECK over the past five weeks."
"He even wants to start a Third Political Party, despite the fact that they have never succeeded in the United States - the System seems not designed for them," Trump added. "The one thing Third Parties are good for is the creation of Complete and Total DISRUPTION & CHAOS, and we have enough of that with the Radical Left Democrats, who have lost their confidence and their minds!"
Tesla stock is down over 22% year to date as the EV-maker faced protests and consumer boycotts over Musk's involvement with the Trump administration via DOGE and his subsequent falling out with Trump over the OBBBA.
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Wedbush Securities managing director and global head of technology research Dan Ives wrote in a note to investors that Musk is wading back into politics at a difficult time for the company.
"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," Ives wrote.
"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," he wrote.
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"After leaving the Trump administration and DOGE there was initial relief from Tesla shareholders and big supporters of the name that Tesla just got back its biggest asset, Musk," Ives explained. "That relief lasted a very short time and now has taken a turn for the worst with this latest announcement."