Tesla shares dropped more than 3% on Monday, July 7, following CEO Elon Musk’s announcement of plans to launch a new U.S. political party, sparking investor concern over his growing political focus.
The move, which intensifies Musk’s ongoing feud with former President Donald Trump, raised fresh doubts about his commitment to Tesla’s leadership. Reuters reported a 3% decline in Tesla stock during Frankfurt trading, indicating potential further losses when U.S. markets reopen after the July 4th holiday.
Wedbush analyst Dan Ives called Musk Tesla’s “biggest asset” but warned that his deeper political engagement could become a distraction from the company’s long-term strategic objectives.
“Tesla needs Musk as CEO and its biggest asset and not heading down the political route yet again… while at the same time getting on Trump’s bad side,” Ives wrote, noting that the development could prompt Tesla’s board to intervene, depending on how far Musk pushes his political ambitions.
Former President Trump dismissed Elon Musk’s plan to start the “America Party” as “ridiculous,” also questioning Musk’s connections to government agencies. Trump specifically pointed to the former appointment of a Musk associate to lead NASA, suggesting it could represent a conflict of interest given Musk’s space ventures through SpaceX.
This latest development adds to the uncertainty around Tesla’s leadership, as investors consider how Musk’s political ambitions might affect the company’s operations and public perception.
