Trump sharply condemns Elon Musk’s initiative to establish a new political party, heightening concerns among Tesla investors.
As tensions escalate between Donald Trump and Elon Musk, the Tesla founder, the former U.S. president’s harsh reaction to Musk’s plan to launch a new political party has amplified worries among Tesla investors.
Political Rift Between Trump and Musk
The political conflict between Donald Trump and Elon Musk has entered a new phase, deepening concerns among investors in Tesla and other companies led by the world’s richest man. Trump attacked Musk’s bid to create a new political party, emphasizing that the U.S. has always maintained a two-party system, and third parties have never succeeded.
Trump’s Remarks on Third Parties
At a press conference on Sunday, Trump criticized Musk’s efforts, stating, “Third parties have never worked; he can have fun, but it’s ridiculous.” He added that America has always had a two-party system and that changing this tradition would not be easy.
Musk Announces Formation of New Party
Elon Musk, Tesla’s founder and CEO, announced on Saturday that a new party called the “America Party” has been formed. However, he has yet to provide further details about the party’s structure or platform, and no official paperwork has been filed so far. This announcement came just one day after Trump signed a tax-cut and spending bill into law—legislation Musk had strongly criticized.
Market Reaction to Musk’s Political Moves
Musk’s deepening involvement in politics triggered a negative response in the stock market. Tesla’s shares, which have already declined by more than 20% this year, dropped nearly 5% in after-hours trading following the party announcement. Analysts predict that Musk’s political engagement will place additional pressure on Tesla’s stock performance.
Expert Analysis of Political Impact
Kok Hoong Wong, head of institutional equities sales trading at Maybank Securities, reported that Tesla shares also fell in Asian markets. Meanwhile, Wedbush analyst Daniel Ives believes the ongoing feud between Trump and Musk will weaken Musk’s standing near the White House and could further isolate him politically.
Analyst’s Warning About Musk’s Political Path
In a note dated July 6, Ives wrote, “Musk’s deeper dive into politics and confrontation with Washington’s political establishment is exactly the opposite of what Tesla investors want during this critical phase.” He warned that this “political gamble” might compel Tesla’s board of directors to intervene, depending on how far Musk pursues this path.
Tesla’s Economic Challenges in the Global Market
Beyond political challenges, Tesla’s core automotive business is also facing difficulties worldwide. Global sales of Tesla vehicles dropped by 13% in the second quarter, placing the company on track for a second consecutive annual decline. Analysts believe Musk’s political decisions could further tarnish Tesla’s brand image and intensify concerns about the company’s financial future.
Conclusion and Future Concerns
Overall, the combined political and economic turmoil, alongside falling stock prices, paints a challenging picture for Elon Musk and Tesla. Investors are closely monitoring Musk’s political and strategic moves, knowing that each new development could significantly impact the market.
