Tesla’s stock price slumped in early trading Monday after CEO Elon Musk’s announced over the weekend that he has formed a new political party following his acrimonious split from President Trump.
The electric vehicle company’s stock fell 7%, at $293 per share, in morning trading.
Musk had threatened to form a new political party if the president’s massive policy and spending bill passed. The tech billionaire made good on his promise this past Saturday, a day after Mr. Trump signed his signature legislation into law on July 4.
“Today, the America Party is formed to give you back your freedom,” Musk said on X.
Musk on Friday hinted that his party would be focused on swaying votes in the House and Senate which currently have a razor-thin Republican majority. He said the America Party would focus “on just 2 or 3 Senate seats and 8 to 10 House districts.”
President Trump responded on Truth Social on Sunday saying Musk was a “TRAIN WRECK” and that he had gone “completely ‘off the rails.'”
Musk has not offered any details on exactly what steps he’s taken toward the creation of a new political party, a complicated process which would require compliance with the diverse laws in each state as well as federal rules.
Still, Musk’s talk of an America Party could reignite investor worries over the fate of the Tesla brand, which was badly damaged after Musk took on a central role in the Trump administration as the head of the Department of Government Efficiency, or DOGE. Musk in late May announced he would step back from the Trump administration. Now, after a public falling out with Mr. Trump over the budget bill, it seems Musk is injecting himself back into the Washington political scene.
“Very simply, Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story,” said Wedbush analyst Dan Ives in a research note on Sunday. “While the core Musk supporters will back Musk at every turn no matter what, there is broader sense of exhaustion from many Tesla investors that Musk keeps heading down the political track.”
Musk’s announcement comes at a precarious time for Tesla. Sales of the electric vehicles fell more than 13% from April to June compared with the same time last year. Sales across Europe also plummeted by almost 50% in April even as the electric car market in the region grew, according to data released by the European Automobile Manufacturers’ Association in May.
The Associated Press contributed to this report.
Mary CunninghamMary Cunningham is a reporter for CBS MoneyWatch. Before joining the business and finance vertical, she worked at “60 Minutes,” CBSNews.com and CBS News 24/7 as part of the CBS News Associate Program.
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