Tesla stock fell 7.6% after Elon Musk announced the formation of his new America Party. The fight with President Donald Trump escalated. Trump called Musk a “TRAIN WRECK” and said his party idea was “laughable” according to CNN Business. Tesla’s stock fell in pre-market trading Monday.
Trump and Musk were friends. Musk spent hundreds of millions on Trump’s re-election bid. He was also head of the Department of Government Efficiency (DOGE). But their fight started in June. Trump’s One Big Beautiful Bill was mocked by Musk. Musk said the bill lowers taxes permanently but raises the national debt.
Tesla’s stock fell 7.6% to 6.5% Monday morning. Trump attacked Musk on Truth Social. Musk has totally lost his mind the last 5 weeks, Trump said. The idea of an America Party would be confusing, he claimed. Tesla investors are terrified.
The fight between Trump and Musk started over the One Big Beautiful Bill in June. The 2017 tax breaks which critics say favor the rich are extended by this bill. Musk says this will hurt the economy. Trump responded by saying he will abolish the subsidies given to Musk’s companies.
This year Tesla’s stock has already fallen 20%. The decline in Tesla sales and Musk’s comments are to blame. Tesla sales have fallen 13% in the last 3 months. The Tesla brand has been hurt by Musk’s relationships with Trump and right wing politicians in Europe. A few customers stopped buying Teslas.
Musk announced the America Party on Saturday. This party he said will compete with the Republican and Democratic parties. He hopes to control the votes and win a few seats in the Senate and House. But Trump mocked the idea. That added to the pressure on Tesla’s stock.
Trump has threatened to kill Tesla’s subsidies before. Those subsidies are crucial to Tesla. The $7,500 tax credit for electric vehicle buyers will expire in September. That will hurt Tesla’s sales. Trump says Musk’s companies would struggle if they weren’t funded by the government.
Tesla has new problems this year. Tesla’s market share in China went from 10% last year to 7.6% this year. New tech is being delayed and cars are getting old. Stock didn’t go up even with the robotaxi service in Austin. Investors are worried about Musk’s antics.
Tesla’s stock was volatile when the Trump vs Musk drama started. It went up 20% in May when Musk backed off DOGE. But now it’s crashing again. Investors are worried that Musk’s politics is taking attention away from Tesla.
For the Tesla board this is a problem. Treasury Secretary Scott Bessent told Musk to stay out of politics. Musk could be asked by the Tesla board to focus on the business. But Musk said he’s going to stick to his party plan. This could impact Tesla’s future.
Musk’s America Party goal is to break the Republican and Democratic stranglehold. But this party has many obstacles to overcome. The threat to eliminate subsidies and Trump’s rejection of the idea has made it worse for Tesla. Regulatory hurdles also exist for robotaxis. Tesla’s investors are worried about this. The Tesla brand has suffered because of it.
Sai Pallu is an entertainment writer based in the USA, contributing to Brief News with engaging content on film, TV, and celebrity culture. With two years of experience at the Times of India, she honed her skills in delivering insightful stories. Her work blends sharp analysis with a passion for storytelling, captivating readers with fresh perspectives.