Tesla Shares Drop 7% After Musk Announces America Party Launch

Tesla shares dropped nearly 7% in premarket trading following CEO Elon Musk's announcement of the formation of a new political entity called the 'America Party.' The move, supported by a poll on Musk's X platform, has raised investor concerns about his divided attention during a critical period for Tesla's development of autonomous vehicles and robotics. Tesla's sales have also declined, with vehicle deliveries down 13-14% in the first half of 2025, and the removal of EV tax incentives in President Donald Trump's recent budget bill adding to headwinds. President Trump criticized Musk's political move as 'ridiculous' and warned that third parties have historically failed in the U.S., escalating a public feud between the two. Analysts warn that Musk's political involvement could increase regulatory scrutiny and distract from Tesla's core business, contributing to the company's stock decline and investor exhaustion. Despite Musk's framing of the America Party as a pro-freedom, anti-establishment movement aimed at influencing key Senate and House seats, Wall Street remains skeptical about its impact on Tesla's future.