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Tesla Stock Sinks Almost 7% As Elon Musk Forms the America Party

Aditya Raghunath
Aditya Raghunath4 minute read
Reviewed by: Thomas Richmond
Last updated Jul 8, 2025
Tesla Stock Sinks Almost 7% As Elon Musk Forms the America Party

@Cotos Iurie's Images via Canva

Key Stats for Tesla Stock

  • Price Change for Tesla stock: -7%
  • Current Share Price: $294
  • 52-Week High: $488
  • TSLA Stock Price Target: $305

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What Happened?

Tesla (TSLA) stock plummeted nearly 7% on Monday after CEO Elon Musk announced plans to form a new political party called the “America Party,” reigniting investor concerns about his deepening political involvement.

The decline in TSLA stock wiped out more than $68 billion in market value as investors expressed frustration with Musk’s continued focus on politics during a challenging period for the electric vehicle company.

The political announcement comes amid Tesla’s operational struggles, including a 14% year-over-year decline in Q2 vehicle deliveries to 384,122 units, marking the second consecutive quarterly drop in sales.

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While the delivery numbers slightly beat lowered analyst expectations of around 387,000, they highlight Tesla’s ongoing challenges from intensifying competition, particularly from Chinese EV makers offering newer and more affordable models.

What the Market Is Telling Us About TSLA Stock

The sharp sell-off in TSLA stock reflects investor exhaustion with Musk’s political activities, which many view as a distraction from Tesla’s core business challenges.

As Wedbush analyst Dan Ives noted, “Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors want him to take during this crucial period.”

The timing is problematic as Tesla faces mounting headwinds. Beyond declining deliveries and competitive pressures in China, Musk’s political involvement has sparked a “political backlash” that is affecting Tesla’s brand and sales.

His relationship with President Trump has also soured, with Trump calling Musk’s new party plans “ridiculous” and saying the Tesla CEO has gone “completely off the rails.”

This political turbulence adds uncertainty to Tesla’s business environment, especially regarding potential impacts on EV subsidies and clean energy policies that benefit the company.

Despite last Wednesday’s brief rally on better-than-feared delivery numbers, Tesla stock remains the worst performer among megacap tech stocks this year with a 22% decline, underscoring investors’ growing concerns about both operational execution and leadership focus.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!

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