Tesla’s stock took a sharp dive in premarket trading on July 7, 2025, dropping nearly 7%, after Elon Musk made yet another headline-grabbing move: he’s launching a political movement called the America Party.
The announcement, which came out of nowhere, immediately spooked investors. Within hours, Tesla’s market value shrank by roughly $70 billion, with shares sliding from about $328 to $305.
Politics Over Production? Investors Get Jittery
Let’s just say, the timing wasn’t on Musk’s side. Tesla is already facing a stack of challenges, from slowing EV sales and delayed projects to missed delivery goals. Throwing a political curveball into the mix? That didn’t sit well with Wall Street.
There’s growing unease that Musk might be taking his eye off the ball. Analysts are warning that his new political venture could derail key projects, such as Tesla’s long-promised robotaxi service, its autonomous driving technology, and expansion plans in international markets.
The last thing investors needed right now was another distraction, said Dan Ives from Wedbush Securities. Everyone expected Musk to double down on Tesla’s AI and EV roadmap. Instead, he’s launching a third-party campaign ahead of the 2026 midterms.
Musk vs. Trump: The Feud Heats Up
Of course, it wouldn’t be a Musk story without a bit of drama. The new America Party is Musk’s attempt at a “pro-freedom, anti-establishment” alternative, and he didn’t hold back. He took a shot at former President Donald Trump’s latest tax reform bill, calling it “anti-innovation” and “a disaster for tech.”
Trump, never one to shy away from a fight, fired back fast. He dismissed Musk’s move as “ridiculous” and warned it could put Tesla’s federal contracts and clean energy incentives in jeopardy.
They’ve sparred before, but this latest back-and-forth has investors especially rattled, mostly because real business consequences now seem more than just possible; they're probable.
Tesla’s Bigger Problem: Too Much on Musk’s Plate
Beyond the political chaos, Tesla’s just... not having a great year. Sales in major markets like China and Europe have been cooling off. The much-hyped robotaxi service? Still delayed. The massive Texas Gigafactory? Falling behind schedule.
And don’t forget the regulatory heat over Tesla’s self-driving promises, which just keeps growing.
For some investors, it’s all starting to look like Musk is stretched too thin. His short-lived resignation from a government advisory post last year gave people hope that he’d refocus on Tesla. But this new political detour? It’s pulled the rug out from under that optimism.
Calls for a Leadership Reset
Now, there’s talk, again, about whether Musk should step back from day-to-day operations or bring in a co-CEO to stabilize the ship.
Musk is Tesla’s soul, no doubt,” said one analyst. But people need to see that his energy is fully back on the company’s future, not on political campaigns.
So, What Happens Next?
Whether Tesla can bounce back from this dip depends on what comes next, especially in Q3. Strong delivery numbers, real progress on Full self-driving, or a big leap in battery tech could help calm nerves.
But for now, investors are sending a pretty loud message: they didn’t buy into Tesla for political theater. They want results. They want leadership. And most of all, they want Musk to focus on the company he built, not the campaign trail.
