Trump, Donald

Tesla Stock Plummets as Elon Musk Announces America Party Plans

Strategic Insights

Jul 6, 2025 — 1 min read

Elon Musk's growing involvement in US politics has sent shockwaves through the investment community, with Tesla shares plummeting 7% on Monday. Musk's announcement of a new "America Party" aims to target 10-12 key electoral districts and sway the outcome of contentious laws, but critics warn that this move could jeopardize Tesla's federal subsidies and its global satellite Internet services provider, SpaceX. Meanwhile, sales of Tesla's electric vehicles (EVs) have suffered a significant decline, with a 14% drop in second-quarter deliveries and a 50% drop in European sales in April.

Key Takeaways:

Tesla shares fell 7% on Monday, the company's worst day of trading since June 5, after Elon Musk announced plans to form the "America Party".
Musk's new party aims to focus on 2-3 Senate seats and 8-10 House districts, potentially giving it the deciding vote on contentious laws.
Tesla faces significant competition in the Chinese market, with sales dropping nearly 50% in April, and is losing market share to other global companies like Apple.
The company's federal subsidies are at risk due to Musk's growing involvement in US politics and criticism from President Trump, who has called Musk's new party "ridiculous".
Dan Ives, global head of technology research at Wedbush Securities, warned that Musk's involvement in politics is contrary to what Tesla investors want, and could harm the company's stock performance.
Tesla's second-quarter car deliveries missed expectations, with a staggering 14% year-on-year decline, amid "Tesla Takedown" protests and dealership arson incidents.

Statistics:

Tesla shares fell 7% on Monday, the company's worst day of trading since June 5.
Sales of Tesla's EVs fell 13% from April to June 2023 versus the same time last year.
European sales dropped 50% in April 2023.
Tesla's second-quarter car deliveries declined 14% year-on-year.
The company's Chinese market sales are under threat from growing competition.

Sources:

July 7 (UPI) -- Chriss Benson
Dan Ives, global head of technology research at Wedbush Securities

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