Tesla Stock Plummets on Musk's Political Ambitions

Tesla stock falls 5.6% in Frankfurt and 5.4% in premarket US trading after CEO Elon Musk announces plans to form a new US political party, escalating his feud with President Donald Trump. Analyst Dan Ives says Musk is Tesla's "biggest asset" and his political involvement may pressure the company's stock. Tesla stock has lost nearly 22% this year.

Title: Tesla Stock Plunges as Elon Musk Announces New Political Party

Tesla's stock experienced significant declines on July 2, 2025, after CEO Elon Musk announced plans to form a new U.S. political party, exacerbating his ongoing feud with President Donald Trump. The stock fell 5.6% in Frankfurt and 5.4% in premarket U.S. trading, erasing billions in market value [1].

The new political party, dubbed "American Party," aims to restore freedom to American citizens, according to Musk's social media post on X (formerly Twitter). Musk's announcement comes at a time when tensions between him and Trump have escalated, particularly over the "Big Beautiful Bill" passed by the U.S. Congress on July 4 [2].

Analyst Dan Ives, a Wedbush analyst, expressed concern about Musk's political involvement. Ives noted that Musk's new party and feud with Trump are causing worry among investors about Tesla's future. Tesla's stock has dropped 22% this year, primarily due to lower sales and Musk's political activities [3].

In response to Musk's announcement, Trump took to his Truth Social platform to criticize the move, stating that Musk's political ambitions could lead to more hurdles for his companies, including Tesla and SpaceX. Trump also threatened to ax federal subsidies for Musk's ventures [4].

Tesla shareholders have shown resilience despite the stock's recent decline. In May, Tesla's stock rose 7% after Musk pledged to focus more on the company, and in June 2024, shareholders approved Musk's controversial $55 billion pay package [3].

As Musk continues to engage in politics, investors remain divided. While some worry about the potential impact on Tesla's stock, others see Musk's political involvement as a sign of his commitment to the company. The ongoing feud between Musk and Trump is likely to continue, which could further impact Tesla's stock performance.

References:
[1] https://www.dynamitenews.com/international/tesla-ceo-elon-musk-enters-politics-forms-new-party-to-challenge-trump
[2] https://www.businessinsider.com/ives-tesla-investors-elon-musk-exhausted-politics-third-party-2025-7
[3] https://finance.yahoo.com/news/teslas-investors-experiencing-exhaustion-musks-031903044.html
[4] https://nypost.com/2025/07/01/business/tesla-stock-plunges-as-elon-musk-reignites-feud-with-donald-trump/