Monday, July 7, 2025 - Tesla shares fell more than 3% on Monday, July 7, as investors reacted with concern to CEO Elon Musk’s announcement of plans to form a new U.S. political party, raising fresh questions about his focus on the electric vehicle company amid escalating political involvement.
The announcement, which comes as Musk deepens his feud with President Donald Trump, rattled markets and cast uncertainty over
Tesla’s leadership stability. According to Reuters, Tesla stock fell over 3% in
Frankfurt trading, suggesting further losses could follow when U.S. markets
reopen after the Independence Day holiday weekend.
Veteran technology analyst Dan Ives of Wedbush said Musk’s
decision to immerse himself more deeply in American politics could put
additional pressure on Tesla’s shares. In a note on Sunday, Ives described Musk
as the company’s “biggest asset” and warned that his increasing political
involvement could distract from Tesla’s strategic goals.
“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.
President Trump criticized Musk’s proposal to launch
what he is calling the “America Party,” dismissing the idea as “ridiculous.”
Trump also questioned Musk’s ties to government agencies, pointing specifically
to the former appointment of a Musk associate to lead NASA, which he claimed
posed a potential conflict of interest due to Musk’s space ventures through
SpaceX.
The latest development adds to an already volatile
environment surrounding Tesla’s leadership and comes as investors weigh the
potential implications of Musk's political ambitions on the company’s
operations and public image.
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