Tesla lost $68 billion in value when its stock plunged almost 7% yesterday in the wake of CEO Elon Musk declaring his intention to forge a new political party, marking the latest evidence that investors wish he’d focus less on elections and more on electric vehicles.
Shareholders seem to be begging Musk to follow through on his May promise to be “super focused” on his businesses and to spend less time on politics after leaving DOGE, a move that coincided with Tesla’s stock jumping 22% that month. But now, Musk wants to start a third party:
- Musk says his new “America Party,” which sounds like a European describing Fourth of July fireworks, will key in on “two or three Senate seats and eight to 10 House districts” in the 2026 midterms.
- The party’s creation is a response to President Trump’s signature tax legislation that was just passed. The law will add to the deficit that Musk sought to slash. It will also axe tax credits for EVs, which could be detrimental to Tesla’s bottom line.
Meanwhile, the anti-DEI investment firm Azoria Partners announced it was delaying its Tesla ETF, saying it needed clarity on how much attention the America Party would require from Musk.
Shorter version: Per Reuters, short sellers betting against Tesla will pocket about $1.4 billion from yesterday’s dip.
Big Picture: Tesla shares have dropped nearly 23% this year, and sales have been down for two straight quarters. Many investors see politics as a distraction for Musk and a danger to Tesla’s brand value.—DL