Musk’s foray into politics hurts Tesla; shareholders are concerned

Tesla stock plunged nearly 7% on Monday, wiping out over $68 billion in market cap amid CEO Elon Musk’s announcement of his America Party.

The move perturbed shareholders who had been asking Musk to focus more on his companies and less on politics after he quit DOGE.

Apart from Tesla, which saw its stock drop ~23% this year, Musk also runs SpaceX, xAI, and owns the social media platform X.

Though the billionaire announced he would be “super focused” on running his businesses, his involvement in politics hasn’t stopped.

His recent feud with Trump over the tax and spending bill caused the EV maker’s stock to crash 14% in June, resulting in a $152 billion loss in market value.

Soon, Musk posted he regretted some of his comments about the president, giving some relief to investors.

However, Tesla deliveries fell for a second straight quarter, with only 384,122 vehicles dispatched globally in Q2 of this year, a 13.5% decline from the same period in 2024.

Now, Musk’s renewed foray into politics with his America Party is stoking concerns among investors, who fear it may affect his companies’ brand image and distract the CEO from his duties.

Wedbush Securities’ analyst Dan Ives called the move “exactly the opposite direction” shareholders want, especially with Tesla facing a drop in deliveries and mounting pressure in China.

Even Musk loyalists, including those who backed his $56 billion pay package, are showing signs of concern.