Tesla Loses $68 Billion in Value After Elon Musk Announces Formation of “America Party”
F.M.I.E Sources report that Tesla shares plunged nearly 7% on Monday, wiping out over $68 billion in market capitalization, following CEO Elon Musk’s announcement that he plans to launch a new political party.
Over the weekend, Musk revealed the party’s name: “The America Party”, explaining that its focus would be narrow but impactful — aiming to influence “2 or 3 Senate seats and 8 to 10 House districts.” According to Musk, such strategic influence could allow the party to become the swing vote on controversial legislation and ensure policies reflect “the true will of the people.”
The news triggered unease among Tesla shareholders, many of whom have repeatedly expressed concerns over Musk’s forays into politics — especially given the recent backlash over his involvement with the now-defunct Department of Government Efficiency (DOGE), where he had collaborated closely with President Donald Trump.
While Musk’s exit from DOGE in May 2025 had briefly buoyed Tesla’s stock, his renewed political activity is now reviving investor anxiety.
“Elon Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors want him going, especially during this crucial phase in Tesla’s growth,” said Dan Ives, Global Head of Tech Research at Wedbush Securities, in a note to clients cited by F.M.I.E Sources.
Ives added that while core Musk loyalists may cheer his political moves, there is increasing frustration among broader investor circles, who feel Musk is straying too far from the company’s core mission during a volatile market period.
Musk’s political entanglements have had both fans and critics. While Trump initially praised Musk for his early involvement in DOGE, their relationship has since soured. The two have clashed over major fiscal policies, including Trump’s spending bill, which Musk criticized as reckless and damaging to U.S. innovation — particularly in clean energy, solar, and EV tax credits.
Trump responded harshly on Sunday, calling Musk’s plan to start a new party “ridiculous” and saying the billionaire has gone “completely off the rails.”
Meanwhile, Tesla faces non-political headwinds as well. The company recently reported a 14% drop in vehicle deliveries year-on-year in Q2 2025, falling short of analyst expectations. Competition is mounting, particularly from EV rivals in China, one of Tesla’s most important markets.
Analysts warn that the combination of brand volatility, declining performance, and political distraction may further strain Tesla’s growth narrative in the months ahead.
— F.M.I.E Sources