Elon Musk, serving as Senior Advisor at the White House, was seen walking back to the building after arriving on Marine One with President Donald Trump on March 9, 2025, in Washington, D.C. Photo Credit: Samuel Corum / Getty Images News
Tesla's stock saw a sharp fall in early trading Monday after Elon Musk revealed he plans to launch a new political party. By 4:27 a.m. ET, Tesla shares had dropped by over 7%, raising concerns among investors about Musk’s latest focus.
Over the weekend, Musk announced the formation of the “America Party.” He stated that the party would concentrate on influencing a small number of seats—specifically two or three in the Senate and eight to ten in the House. Musk explained that even such a limited presence could shift the balance in Congress and ensure laws reflect what he called "the true will of the people."
This announcement stirred mixed reactions, especially among Tesla shareholders who’ve grown wary of Musk’s political ambitions. Earlier this year, Musk joined the Department of Government Efficiency (DOGE), working alongside former President Donald Trump. That involvement triggered criticism and worries that his political ties could damage Tesla’s public image.
Musk’s exit from DOGE in May had given the company’s stock some breathing room, but his latest political move is once again causing unease. The timing couldn’t be more critical. Tesla is facing a challenging phase, and investors believe that Musk’s full focus should be on the company’s core operations.
Dan Ives, a prominent tech analyst at Wedbush Securities, shared a candid view in a note on Sunday. “Musk plunging further into politics and aiming to challenge the Washington status quo is the exact opposite of what Tesla shareholders want right now,” he wrote.
While Musk enjoys unwavering loyalty from a section of fans and supporters, many long-term investors are reportedly tired of these political distractions. They fear that his constant shifts toward politics could pull attention away from Tesla’s ongoing business priorities, like EV production, software upgrades, and global expansion.
Tesla, as a brand, has long been associated with innovation and sustainability. However, Musk’s political ventures could be seen as pulling the brand into controversial territory. Critics argue that it risks turning off a wider customer base that prefers their carmakers to stay apolitical.
In the past, Musk’s unpredictable statements and political opinions have made headlines—and not always for the right reasons. For investors, each detour into politics creates fresh uncertainty about the company’s future direction.
As of now, it remains to be seen how far Musk will go with his political ambitions and how they will impact Tesla in the long term. What’s certain is that the markets are already reacting—and not in a way that pleases shareholders.
