Tesla stock dives amid Musk’s America Party announcement and worsening feud with Trump
Tesla shares plunged around 7 per cent in pre-market trading after Elon Musk announced the launch of a new U.S. political party, dubbed the “America Party”, and reignited a public feud with former President Donald Trump. This follows Trump’s criticism of Musk’s move and the recent passage of his “One Big Beautiful Bill”, which eliminates a $7,500 EV tax credit and reduces Tesla’s credit‑sales revenue. A downgrade by analysts at William Blair, citing weakened profitability, and investor backlash over Musk’s political distraction during a critical phase for AI and autonomous vehicle projects, intensified the stock sell-off. Tesla shares remain down about 21 per cent year‑to‑date despite earlier rebounds. Analyst Dan Ives (Wedbush) urges Musk to refocus on business, warning that escalating tensions with Trump could create regulatory and financial headwinds.
🔁 Reactions:
- Donald Trump: “It’s ridiculous – third parties never work. Musk has gone ‘off the rails.’”
- Dan Ives (Wedbush): “Investors want him focused on Tesla’s AI future, not politics.”
- Treasury Secretary Scott Bessent: > “Boards will want Musk focusing on his companies, not political ventures.” (marketwatch.com)
📰 Media Bias & Framing:
- MarketWatch/Bloomberg/CNN note the sharp drop and attribute it to Musk’s political pivot and tax-credit loss.
- Reuters/Wall Street Journal highlight the tension between Musk’s political ambitions and investor expectations during a transformative phase for Tesla’s AI and robotaxi plans.
- Financial Times contextualises within broader U.S. political volatility, Musk’s feud with Trump, the third-party announcement, and investor uncertainty.
📊 Sentiment: Negative–neutral. The reaction reflects investor unease and mounting pressure. Though Tesla’s long-term AI and EV strategy still retains confidence, Musk’s political distraction is seen as a potential drag on momentum and stock value.