By gistofnews.com | July 8, 2025
Tesla shares plunged on Monday. The drop was steep — down as much as 7.6% in premarket trading. A surprise political move. Tesla CEO Elon Musk announced plans for a new U.S. political party. It was unexpected. The news sparked a public feud with former President Donald Trump and pushed already anxious investors into further uncertainty.
The stock (TSLA) tried to recover. But when trading resumed at 9:30 a.m., it opened 7.6% lower. That’s Tesla’s biggest single-day drop since June 5. That’s no small change.
Musk’s announcement came late Saturday night. He unveiled his third-party idea through a post on his social media platform X — calling it “The America Party.” His stance was clear. He pitched the move as a response to the “one-party system” in American politics, blaming both Republicans and Democrats for “waste and corruption.”
Trump jumped in almost immediately. The former president posted a harsh response on his Truthout platform Sunday night. His words:
“I am saddened to see how Elon Musk has derailed over the last five weeks.”
Earlier, before boarding Air Force One in New Jersey, Trump dismissed Musk’s political aspirations as “ridiculous.” He warned that it would make things even more unclear for voters. Confusion, not clarity.
Investors worry about distractions and EV subsidies.
Market analysts are paying attention to the tension. For investors, the feud is about more than just headlines. It raises concerns that Musk has become distracted again from running Tesla. Recently, he seemed to step away from open politics. That return brought some relief. Now, his sense of focus is in doubt.
“Investors had cheered Musk’s retreat from frontline politics,” wrote Saxo Markets UK strategist Neil Wilson on Monday. “But now they worry they’ll get caught up again and take their eye off Tesla.”
There’s another risk. A prolonged battle between Musk and Trump could put Tesla’s federal EV subsidies at risk. The current administration is already facing calls to rethink green energy policies.
Tough times for Tesla.
Tesla is caught in the middle of the storm. The timing isn’t right. Last week, the company announced a 13.5% drop in vehicle sales in the second quarter — its largest quarterly drop ever. Not only that, but it also marked the first time in Tesla’s public history that sales declined year over year, by less than 1%.
But the competition isn’t waiting. Tesla’s days as the world’s top electric vehicle maker are numbered. BYD, a Chinese competitor, is moving fast. Despite having abandoned the U.S. market so far, BYD’s rapid growth in Europe, Asia and South America is giving it significant momentum.
Musk himself has been in the political spotlight. He led a short-lived “government efficiency” task force that was criticized for resulting in widespread federal layoffs. He resigned from that position in May, but new developments suggest he’s only getting more involved in politics.
From Boom to Backlash
Earlier this year, Tesla’s stock was on fire. Investors rejoiced after the 2024 election, hoping Trump and Musk would work together — hoping Tesla would benefit from it. Now the narrative has flipped. The public split, and the launch of a rival political party by Musk, changed everything.
Now, there are protests outside Tesla stores around the world. Customers are expressing concerns — not just about the cars, but also about Musk’s public and political actions.
What looked like a boom has turned into a steep decline. Tesla’s stock is down more than 35% from its December high.
Musk looks ready to wade more into politics, possibly for a full-blown campaign. But this raises a clear question for Tesla shareholders: Can Elon Musk quickly lead both a revolution and his company?
