Elon Musk’s Political Move Wipes $79B Off Tesla’s Value
Tesla’s stock dropped 6.8% on Monday, slashing nearly $79 billion from the company’s valuation in just one day, as investors grew uneasy over CEO Elon Musk’s announcement of a new political party. The electric vehicle giant’s market cap fell from over $1 trillion to approximately $921 billion, with Musk personally losing close to $15 billion from his stake, which now stands below $120 billion.
According to Forbes, Musk, who also heads SpaceX, remains the world’s wealthiest individual with an estimated net worth of $400 billion, But his deepening involvement in U.S. politics particularly the launch of the so-called “America Party” is beginning to worry shareholders.
Rising Tensions with Trump Add to the Market Fallout
The tension between Musk and former U.S. President Donald Trump has added fuel to investor concerns. What began as a seemingly strong political alliance has turned into public criticism. Many are now questioning whether Musk can stay focused on Tesla during such a critical period or whether political distractions will derail the company’s progress.
Dan Ives, analyst at Wedbush Securities, reflected the market’s growing frustration. “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,” he said. He also noted a “broader sense of exhaustion” among Tesla investors, who are uneasy about Musk’s dual focus.
America Party Launch Sparks Political and Financial Reactions
On Sunday, Trump responded sharply to Musk’s move, calling his plans “ridiculous.” In a post on Truth Social, he wrote:
“I am saddened to watch Elon Musk go completely ‘off the rails,’ essentially becoming a TRAIN WRECK over the past five weeks.”
Musk had announced the creation of the America Party just days before on his X platform:
“When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy. Today, the American party is formed to give you back your freedom.”
As competition in the electric vehicle market intensifies and Tesla works to meet critical goals, Musk’s political involvement may continue to weigh heavily on investor sentiment. The question now is whether this political pivot will be short-lived or begin to reshape Tesla’s future trajectory.
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