Car industry Tesla shares fall after Musk's party announcement
Tesla shares fell significantly in value after CEO Elon Musk announced the founding of his own political party. In addition, US President Donald Trump signed the Tax and Spending Act into law, which provides for the abolition of electric car subsidies.
07.07.2025, 16:34
SDA
Tesla shares started Monday's US trading session down around seven percent. The electric car manufacturer is struggling with declining deliveries. Analysts believe that Musk's right-wing views and his political activities have damaged the Tesla brand and contributed to this.
Following Musk's party announcement, several analysts expressed criticism. Dan Ives from Wedbush Securities, for example, called for the board of directors to intervene. Jed Dorsheimer from the financial firm William Blair emphasized that investors see the foray into politics as a distraction, while the Tesla business needs Musk's attention. Musk had announced in the spring that he would once again focus more on Tesla's interests after months of being active in Washington as Trump's cost-cutter.
Musk announced the founding of a party called the America Party at the weekend. According to Musk, it is intended to establish itself as a third force alongside Trump's Republicans and the Democrats.
Musk is by far the richest person in the world with an estimated fortune of more than 360 billion dollars. However, it mainly consists of his investments in Tesla and the non-listed aerospace company SpaceX. As a result, Musk's wealth also declines with the price of Tesla shares.
