Tesla shares continue to slide as the feud between CEO Elon Musk and President Donald Trump escalates. After Musk announced plans to form his own political party called the “America Party,” Tesla’s stock fell 7% on Monday. The company has now lost more than $68 billion in market cap.
Here’s why it matters:
Musk’s formation of a new political party and his growing rift with President Donald Trump could further politicize the EV space, which already influences buyer preferences and policy-driven incentives. Continued clashes with the president also threaten the future of Musk’s companies, Tesla and SpaceX, both of which heavily depend on government contracts, subsidies and federal regulations. As autonomous driving and AI technologies advance, these businesses could become even more vulnerable to political decisions.
Key takeaways:
- Tesla’s U.S. performance continues to slide
The company’s shares dropped 7% on Monday and have lost more than $68 billion in market cap. - Musk’s feud with President Trump risks his company’s future
President Trump has already threatened to pull billions of dollars of subsidies from Musk’s companies. - Tesla’s global performance is also weakening
In addition to softening U.S. demand, Tesla is losing momentum overseas. European sales have declined for five consecutive months, and competition in China from EV makers like BYD is rapidly increasing. - Tesla’s brand identity is weakening
The automaker’s public image has taken a hit since Musk’s involvement in the political space. The 7% stock drop reflects growing investor concerns and consumer fatigue with his political activity. - Demand for Tesla vehicles is diminishing
With brand perception deteriorating and the federal EV tax set to expire, Tesla may struggle to move vehicles. The lack of incentives and ongoing political backlash could make recovery more difficult.
