Shares of electric vehicle maker Tesla Inc fell sharply in pre-market trading on Monday after its billionaire CEO Elon Musk announced the launch of a new political outfit called the 'America Party' over the weekend.
At around 4:15 pm IST, Tesla shares were down 6.84 percent at $293.78 in pre-market trade, indicating a gap-down opening when US markets open later in the evening at 7 p.m. The stock has declined nearly 17 percent so far in 2025.
Musk, who was previously aligned with US President Donald Trump, said on social media platform X that he had formed a new party to challenge the dominant Republican and Democratic parties in the US. The move drew sharp criticism from Trump, who called it “ridiculous” and said Musk had gone “completely off the rails.”
Investor sentiment towards Tesla appeared to sour following the political announcement, as concerns resurfaced over Musk’s growing political involvement. Analysts have previously warned that Musk's active role in politics has, at times, distracted from core business operations and affected the company’s brand perception.
Tesla shares had earlier faced pressure during Musk’s involvement with the Trump administration through the Department of Government Efficiency (DOGE). After stepping down from that role, Musk had reassured shareholders of his commitment to Tesla and his other ventures, leading to a brief recovery in the stock.
Musk, who was one of the largest individual donors to Trump’s 2024 campaign, had publicly criticised the administration’s “One Big Beautiful Bill,” warning that the measure would increase the federal deficit significantly. The bill was signed into law earlier this week following a narrow vote in Congress, reportedly causing a fallout between Musk and Trump last month.
Musk said the new party would be fiscally conservative, though he has not shared a detailed policy framework so far.
Meanwhile, broader market sentiment remained weak, with Wall Street Futures trading lower as global trading partners sought to wrap up negotiations with the Trump administration before a July 9 tariff deadline. S&P 500 Futures were down 0.30 percent, Dow Jones declined 0.08 percent and Nasdaq Futures slipped 0.40 percent.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
