Tesla Shares Drop as Musk’s Political Plans Stir Investor Concerns
Tesla shares declined by more than 3% on Monday, as investors reacted to CEO Elon Musk’s announcement of plans to launch a new U.S. political party—an escalation in his ongoing dispute with former President Donald Trump.
Trading in Frankfurt saw Tesla (NASDAQ: TSLA) fall over 3%, indicating further losses could follow in U.S. premarket trading after the Independence Day holiday weekend.
Dan Ives, a longtime technology analyst at Wedbush, warned that Musk’s foray into politics could weigh heavily on Tesla’s stock. He called Musk the company’s “greatest asset” and said diverting his attention to political ambitions could unsettle markets.
“Tesla needs Musk focused as CEO, not entangled in another political episode—especially when it risks further alienating Trump,” Ives wrote in a Sunday note. He also suggested the company’s board might step in if Musk’s political activities escalate further.
Trump, for his part, dismissed Musk’s plan to establish the so-called “America Party” as “ridiculous” in a Truth Social post, and renewed personal attacks on the Tesla CEO. He also criticized Musk’s past support for a NASA leadership pick, arguing it posed a conflict of interest given Musk’s extensive business ties to space exploration.
