Tesla shares fell more than 7% after CEO Elon Musk announced plans to form his own political party.
CNBC reports this.
Tesla Shares Fall and Musk's Political Ambitions
As of 4:27 a.m. ET on July 7, Tesla shares were down 7.13%.
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Over the weekend, Elon Musk said his political force would be called the America Party and could have 2-3 seats in the Senate and 8-10 in the House of Representatives.
Musk believes that such representation will be enough to become the deciding vote on controversial laws, ensuring that they correspond to the true will of the American people.
Elon Musk's involvement in politics has been a source of controversy among investors. Musk previously served as the head of the Office of Government Efficiency (DOGE) and worked closely with President Donald Trump. Musk left DOGE in May, which had a positive impact on Tesla shares.
Now the billionaire's return to politics is causing concern among investors.
“Musk's delving into politics and now trying to get into power in Washington is the exact opposite direction that Tesla investors and shareholders want him to take at this critical time for Tesla,” said Dan Ives, global head of technology research at Wedbush Securities.
US President Donald Trump called Musk's decision to create a political party “ridiculous”, adding that the Tesla boss has gone completely crazy.
Tesla reported a 14 percent year-on-year decline in vehicle deliveries in the second quarter of 2025 as the company faces increased competition, particularly in its key market of China.
