Tesla shares slide after Musk plots new political party in latest Trump snub
Tesla has once again lost its status as a trillion-dollar company after the EV-maker’s stock slid on Monday on the back of CEO Elon Musk’s plans to launch a new US political party.
Shares in the Nasdaq-listed business fell as much as 7.5 per cent in the opening minutes of trade in New York, giving the firm a market cap of around $910bn and intensifying the decline of the stock, which is down around a quarter since the start of the year.
Tesla CEO Musk, who quit his role in the White House at the end of May, has since been critical of President Donald Trump and had been teasing the prospect of launching his own party for several weeks.
Over the weekend, Musk unveiled his plans to set up the “America Party” to challenge the Republican and Democratic “Uniparty” after rebuking Trump over his plans to increase the national debt.
Trump hit back at the plans on Sunday. “I think it’s ridiculous to start a third party,” Trump said before boarding Air Force One. “It’s always been a two-party system and I think starting a third party just adds to the confusion.”
More Tesla troubles
Musk’s new political foray comes as Tesla continues to battle depressed demand as European consumers are turned off by the public interventions by the carmaker’s CEO.
Tesla deliveries hit a three-year low in the first quarter, a drop of 13 per cent compared to the previous year, while the number of new Teslas registered across Europe sunk 37 per cent during the first five months of the year, according to the European Automobile Manufacturers’ Association, despite the fact that battery-electric vehicle sales were up 28 per cent across the continent.
The firm, which remains the top-selling EV brand in the US, has seen its share of its home market slide from 75 per cent in 2022 to just 50 per cent today, recent estimates suggest. The firm is also seen sales dwindle in China over the growing availability of cheaper alternatives such as those by BYD.
“Investors are growing tired of the distraction at a point when the business needs Musk’s attention the most and only see downside from his dip back into politics,” said Jed Dorsheimer, an equity analyst at William Blair, after downgrading Tesla’s stock.