White House Senior Advisor Elon Musk walks to the White House after landing in Marine One on the South Lawn with U.S. President Donald Trump (not pictured) on March 9, 2025 in Washington, DC.
Samuel Corum | Getty Images News | Getty Images
Tesla shares fell in premarket trade on Monday after CEO Elon Musk announced plans to form a brand new political party.
The stock was down 7.13% by 4:27 a.m. E.T.
Musk said over the weekend that the party could be called the “America Party” and will focus “on just 2 or 3 Senate seats and eight to 10 House districts.” He suggested this could be “enough to serve because the deciding vote on contentious laws, ensuring that they serve the true will of the people.”
The billionaire’s involvement in politics has been some extent of contention for investors. Musk earlier this 12 months was a part of the so-called Department of Government Efficiency and worked closely with President Donald Trump — a move seen as potentially hurting Tesla’s brand.
Musk left DOGE in May, which helped Tesla’s stock.
Now tech billionaire’s reinvolvement within the political arena is making investors nervous.
“Very simply Musk diving deeper into politics and now attempting to tackle the Beltway establishment is strictly the wrong way that Tesla investors/shareholders want him to take during this important period for the Tesla story,” Dan Ives, global head of technology research at Wedbush Securities, said in a note on Sunday.
“While the core Musk supporters will back Musk at every turn regardless of what, there may be broader sense of exhaustion from many Tesla investors that Musk keeps heading down the political track.”
Musk’s previous political foray earned him Trump’s praise within the early days, but he has since drawn the ire of the U.S. president.
The 2 have clashed over various areas of policy, including Trump’s spending bill which Musk has said would increase America’s debt burden. Musk has taken issue to particular cuts to tax credits and support for solar and wind energy and electric vehicles.
Trump on Sunday called Musk’s move to form a political party “ridiculous,” adding that the Tesla boss had gone “completely off the rails.”
Musk is contending with greater than just political turmoil. Tesla reported a 14% year-on-year decline in automotive deliveries within the second quarter, missing expectations. The corporate is facing rising competition, especially in its key market, China.
