Tesla’s stock price plunged by around seven per cent on Monday, the first day of trading after company CEO Elon Musk announced he would form the ‘America Party’ over the weekend.
The move drives another wedge between Mr Musk and US President Donald Trump, who criticised the Tesla chief’s plan to challenge the country’s existing two-party political system on his own social media platform.
“The one thing Third Parties are good for is the creation of Complete and Total DISRUPTION & CHAOS, and we have enough of that with the Radical Left Democrats, who have lost their confidence and their minds!” said President Trump in a Truth Social post on Sunday (July 6).
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“I think it’s ridiculous to start a third party. We have a tremendous success with the Republican Party. The Democrats have lost their way, but it’s always been a two-party system, and I think starting a third party just adds to confusion,” he told reporters the same day.
A day earlier on Saturday (July 5), Mr Musk said a poll he conducted on his own social media platform, X, showed resoundingly that Americans want a third political party.
“By a factor of 2 to 1, you want a new political party and you shall have it,” he posted on X.
“When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy. Today, the America Party is formed to give you back your freedom.”
By noon on Monday, however, Tesla stock had fallen by 7.6 per cent or about $21 per share, seemingly due to fears from investors that politics would damage the Tesla brand, wiping about US$15 billion (A$23.05bn) from the market value of the US electric car maker, although Mr Musk remains the world’s richest person.
At the close of NASDAQ stock exchange trading yesterday, Tesla shares were down by US$21.41 or 6.79 per cent, to US$293.94, and are now down by about 14 per cent since early June, when Mr Musk first publicly criticised President Trump and the Republican-backed One Big Beautiful Bill.
Tesla stocks are down 31 per cent since Mr Trump’s inauguration in January, and the company last week reported almost 14 per cent fewer deliveries in the second quarter of this year.
In its worst sales performance since 2022, Tesla has now posted two consecutive quarterly declines in vehicle deliveries in 2025, amid controversy and protests about Mr Musk’s previous involvement with the Trump administration and the Department of Government Efficiency (DOGE).
After donating at least US$277 million (A$425.04m) to the Trump camp during the 2024 US election campaign and then heading up DOGE, the CEO of both Tesla and SpaceX began a very public feud with President Trump when he said the administration’s new funding bill would plunge Americans into debut for generations to come.
Signed into law on July 4, the One Big Beautiful Bill Act is forecast to add about US$3.4 trillion (A$5.22tn) to the US national deficit over the coming decade, according to estimates by the Congressional Budget Office.
However, the Trump administration has dismissed estimates like these on the basis they do not factor in economic growth under the bill, and President Trump has accused Mr Musk of criticising the bill because it will end federal subsidies for Tesla.
But Mr Musk has long encouraged the Trump administration to axe US government tax credits for electric vehicles, and after President Trump threatened to cancel government contracts awarded to Mr Musk’s companies, he said on X that SpaceX would “begin decommissioning its [the US government’s] Dragon spacecraft immediately”, putting several US space programs at risk.
SpaceX is one of the US government’s largest defence contractors and, apart from Tesla, Mr Musk also heads up The Boring Company, Starlink, Neuralink and xAI.
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