Musk launches political party, Tesla’s stock plummets

The CEO of Tesla, SpaceX and X had warned that he would create a new political party if the budget bill by by the American president passed, which it did.

Since the “Big Beautiful Bill” of Donald Trump was finally passed by Congress on July 3, then ratified by the President the following day, Musk moved into action.

The tech mogul had launched a poll on the idea on his X social network. “By a ratio of two to one, you want a new political party” he announced, as 65% of some 1.2 million voters answered “yes” for the creation of the “America Party”.

According to a Gallup poll, in 2024, as in previous years, a clear majority of respondents (58% vs. 37%) considered the creation of a third party “necessary”. Musk justified his move by explaining that it was intended to give a voice “to the middle 80%”.

“I think it’s ridiculous to start a third party. We’re having tremendous success with the Republican Party,” Donald Trump reacted to reporters in New Jersey. “I think launching a third party just adds to the confusion,” he continued.

Shortly afterwards, on Truth Social, Trump said: I am saddened to watch Elon Musk go completely off the rails, essentially becoming a TRAIN WRECK over the past five weeks. He even wants to start a Third Political Party, despite the fact that they have never succeeded in the United States.”

Musk and Trump were close during the first months of the president’s term. Musk had supported the Republican’s election campaign with more than $270 million. He was also placed at the head of the Commission on Government Efficiency (DOGE).

He then left this position in May to take control of his businesses, in particular the electric vehicle company Tesla, whose image and sales have suffered around the world due to his association with Trump.

According to Musk, Trump’s “Big Beautiful Bill” will lead the country to “bankruptcy”, denounced the billionaire on X.

Reacting to his opponent’s criticism, Trump had said that the Commission on Government Efficiency (DOGE) could attack the public subsidies allocated to the latter’s companies.

“While the core Musk supporters will back Musk at every turn no matter what, there is broader sense of exhaustion from many Tesla investors that Musk keeps heading down the political track,” commented Wedbush analyst Dan Ives. The “initial relief” at his departure from DOGE was “short-lived”, he added.

After peaking in December, Tesla’s share price has plummeted by more than 50%, reports Forbes.

Tesla’s share price fell by almost 7% on Wall Street after Musk announced the creation of the “America Party”. By the end of the day, it had fallen 6.79% to $293.94, dropping below the symbolic threshold of $1,000 billion in market capitalization.