Tesla share price erodes investor wealth worth $68 billion as Elon Musk launches his own ‘America Party’

Tesla Inc. shares tumbled 6.8% on Monday (July 7), erasing more than $68 billion in market cap, after CEO Elon Musk revealed plans to launch a new political party — the “America Party.”

The new party move, announced over the weekend, reignited a public feud between Musk and former ally President Donald Trump, escalating investor concerns about the company’s future direction.

The steep drop marks one of the worst single-day performances for Tesla this year and comes amid growing concerns that Musk’s political ambitions could further distract from his role as chief executive of the electric vehicle giant.

Tesla’s stock slide wiped out $15.3 billion from Musk’s net worth, according to the Bloomberg Billionaires Index. The fall marked the largest since Musk's earlier clash with Trump in June, when their spat over a Republican tax bill erased $150 billion from Tesla’s market value in a single day.

Trump lashed out at Musk’s political ambitions, calling the idea of the “America Party” “ridiculous.” He also threatened to cut off federal subsidies to Musk’s companies, deepening fears among investors.

The market turmoil wasn’t limited to Tesla. Wall Street saw widespread losses as the White House issued tariff notices to key allies, including Japan and South Korea, threatening import duties of up to 40% starting August 1. The S&P 500 dropped 0.8% — its biggest loss since mid-June — while the Dow fell 422 points (0.9%) and the Nasdaq slid 0.9%.

Elon Musk has officially announced the formation of a new political movement — the “America Party” — in a bid to challenge what he describes as the entrenched bipartisan dominance of the US political system.

The Tesla and SpaceX CEO took to platform X (formerly Twitter) over the weekend to declare that the America Party will serve as a counterweight to what he called the “Republican/Democrat Uniparty,” accusing both major parties of working against the interests of the American people.

“The America Party is needed to fight the Republican/Democrat Uniparty,” Musk posted early Monday.

The announcement follows a series of posts Musk made over the weekend, in which he gauged public interest via a poll on X. According to Musk, the response was overwhelmingly in favor of a new political party.

“By a factor of 2 to 1, you want a new political party and you shall have it!” Musk declared in a post on Sunday.

“When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy. Today, the America Party is formed to give you back your freedom.”

This isn’t the first time Musk has floated the idea of a third party, but the timing of the formal announcement — just days after the US Senate passed President Donald Trump’s sweeping tax and spending legislation dubbed the “One Big Beautiful Bill” — indicates a deeper political rift between Musk and his former ally Trump.

The unveiling of the America Party escalates Musk’s ongoing public feud with Trump, which reignited in recent weeks over the Republican-led tax and spending bill. Musk, once a top donor and informal advisor to Trump, has grown increasingly critical of GOP spending and governance.

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