Tesla Shares Tumble 5% as Musk Launches America Party

Elon Musk, the CEO of Tesla, announced the formation of the America Party on July 5, a move that was catalyzed by the passing of the Trump administration’s controversial One Big Beautiful Bill Act. This bill, which raised the federal debt ceiling by $5 trillion and provided tax breaks primarily benefiting the 1%, was seen by Musk as a betrayal of the administration’s initial efforts to cut government spending. The America Party, while still in its formative stages, has been vaguely described by Musk as supporting centrism, deregulation, reduced government spending, and Bitcoin (BTC).

Musk’s announcement elicited a response from President Trump, who criticized the idea of a third party, stating that it would only add to confusion. Despite the lack of a specific platform, Musk has hinted at the party’s potential stance on various issues, including support for Bitcoin, centrist values, and reduced government spending. However, these claims remain vague, and there is no official entity or website for the America Party as of yet. Musk has asked his followers on X where the first America Party Congress should take place, indicating that the party is still in the early stages of development.

Historically, third parties in American politics have faced significant challenges. From the Populist Party in the late 19th century to the Progressive Party in the early 20th century, and more recently, the Forward Party led by Andrew Yang, no third party has been able to break the two-party system. Collin Anderson, a clinical assistant professor of political science, noted that the structure of the U.S. political system tends towards two major effective parties, and a third party would need a major shift in the political landscape to gain traction. Anderson suggested that the MAGA/Republican base could fracture once Trump leaves politics, providing an opportunity for Musk to make his move.

Francis Wilkinson, a columnist, pointed out that Musk’s strategy of focusing on a few vulnerable House and Senate districts could potentially work in the short term. However, without changing the structure of American elections and the strategic motivations of voters and candidates, the impact would be limited. Wilkinson also noted that Musk’s involvement in politics could create major headaches for the Republican Party, given his fame, influence, and financial resources. Musk has the potential to be a “chaos monkey,” disrupting the political landscape with his actions and statements.

Musk’s political ambitions have not been well-received by his business partners. James Fishback, CEO of investment firm Azoria, decided to delay the listing of the Azoria Tesla Convexity ETF following Musk’s announcement, citing concerns about the conflict with his full-time responsibilities as CEO of Tesla. Fishback stated that a political party not only fails to complement Tesla’s mission but actively undermines it. Tesla shares also tumbled on the news of Musk’s political ambitions, reflecting the market’s concerns about the potential impact on the company’s performance.

Musk’s past political involvement has not been particularly successful. His direct involvement in a Wisconsin Supreme Court race in March 2025, where he campaigned for the Trump administration’s preferred candidate, Brad Schimel, did not yield the desired results. Despite wearing a cheese hat, giving away $1-million checks to voters, and calling the election “a super big deal,” Democratic candidate Susan Crawford won by a significant margin. Musk is now targeted in a lawsuit related to his actions during the campaign.

Despite the challenges and setbacks, Musk’s America Party has the potential to disrupt the political landscape. However, the party’s success will depend on its ability to overcome the structural barriers of the two-party system and gain traction among voters. Musk’s support for Bitcoin and his centrist values could resonate with some voters, but the party will need a clear platform and effective strategy to compete with the established parties. Nic Puckrin, a crypto analyst, investor, and founder of The Coin Bureau, noted that regardless of the outcome, Bitcoin will continue to thrive as the US dollar faces challenges. The future of the America Party remains uncertain, but its formation marks a significant development in the political landscape.