In July 2025, Elon Musk did what only Elon Musk could: he started a political party , Called the America Party, it came out of nowhere, yet somehow felt predictable, another headline move from the billionaire entrepreneur. The very next day, Tesla stock plunged nearly 7% .
The America Party: What Is It and Why Now ?
Musk introduced the America Party as a “centrist and logic-driven” movement aiming to challenge the U.S. two-party system
According to him , both Democrats and Republicans have failed to represent innovation , personal freedom, and national progress .
He promoted it on X (formerly Twitter) , stating:
"It’s time for a party that puts sanity, science, and sovereignty first."
The announcement came shortly after Musk’s public falling-out with Donald Trump, leading many to see the party as part political ambition , part personal feud .
While Musk has always commented on politics , this is his first real step into the arena , and it’s a bold one.
Donald Trump Responds to Musk’s America Party.
Shortly after Musk’s announcement , Trump posted a fiery message on Truth Social , his social media platform. He referred to Musk as a “brilliant but unstable tech guy” and warned that the America Party is “nothing but a vanity project” that would “hand the next election to the radical left .” Trump also accused Musk of splitting the conservative vote, saying :
“Elon is helping the Democrats. This ‘party’ is a joke, and he knows it.”
Despite the harsh words, Musk hasn’t fired back directly , yet. Instead , he’s maintained a public stance that the America Party is about “breaking the system” and “restoring rational governance.” But the tension between him and Trump is now impossible to ignore .
Some political strategists believe that a full-on Musk vs. Trump showdown is inevitable if the America Party gains traction. Both men are powerful , wealthy, media-savvy, and unafraid of controversy. They appeal to overlapping audiences- but their egos and ideologies are increasingly diverging .
Tesla’s Stock Reaction : Why Did It Drop ?
After the America Party launch , Tesla shares saw a 6.9% decline in just one day. That’s billions of dollars in market value- gone .
Musk already juggles Tesla , SpaceX , Neuralink , The Boring Company , and X. Adding politics to the mix increases fears that he’s spread too thin .
If Musk’s new party stirs controversy , Tesla’s brand could take a hit , especially in markets where public image matters .
Shareholders worry that if Musk’s time is split , it could delay Tesla’s projects , weaken focus , or even force the board to reconsider his role .
Is Musk Really at Risk of Losing His CEO Role ?
Tesla’s board hasn’t made any public statements , but analysts say internal pressure may increase if the stock keeps sliding or if Musk’s political efforts take center stage .
Back in 2018 , Musk nearly lost his CEO title after the infamous “funding secured” tweet. He paid a fine and stepped down as Tesla chairman. In 2022, after the Twitter (now X) acquisition , Tesla shares fell by over 60% as investors feared he was distracted .
Now , in 2025, Musk is again at the center of a possible CEO crisis , not because of what he said , but because of what he’s doing .
Tesla’s Big Year Ahead—And Why It Needs Focus
what’s on the company’s plate in 2025:
Cybertruck expansion : Tesla is scaling production to meet massive preorders .
Full Self-Driving (FSD) rollout : Regulatory approvals are still pending globally .
AI and Dojo project : Tesla is working to become a serious AI player .
Energy division growth : Powerwall, solar roofs, and Megapacks are expanding .
Investors , employees , and even consumers are looking for signs that the company can stay focused , committed, and undistracted-especially with Elon Musk now diving into politics .
Fans vs Investors
Online , Musk’s fans are rallying behind the America Party. On X , many are praising his courage and calling him the leader America needs .
To them, Musk represents a modern-day revolutionary, willing to challenge norms and speak out when others won’t. For this group, the America Party isn’t a distraction , it’s the natural next step in Musk’s evolution .
But the financial world is more cautious . Shareholder groups , especially institutional investors, are voicing concern . Some are demanding clearer communication from the Tesla board and even hinting at succession planning if Musk’s attention continues to drift .
Musk acquired Twitter in 2022 , or when he launched multiple high-risk ventures at once. Now, with Musk stepping into politics full-time , they’re asking whether Tesla’s long-term strategy is still the priority.
Some are demanding more transparent communication from the Tesla board , and a few have even begun whispering about succession planning in case Musk shifts too far from his core responsibilities .
For the first time in a while , there’s a growing divide between public admiration and investor patience , and how Musk navigates this tension could define Tesla’s next chapter.
Will the America Party Hurt Tesla’s Brand ?
Tesla is not just a tech company , it’s a lifestyle brand . From electric cars to clean energy, Tesla’s appeal lies in innovation, coolness, and trust .
Getting into politics , especially in such a divided time , risks alienating customers . If Musk’s views offend large groups of people, Tesla may face backlash in certain states or even countries .
In Europe, where political neutrality is valued , Tesla’s reputation could suffer. In blue U.S. states, Musk’s growing association with culture wars may drive buyers toward competitors .
What Should Shareholders Do Now ?
For Tesla shareholders, the launch of Elon Musk’s America Party creates an uncomfortable sense of déjà vu . Once again, the man who built Tesla into a trillion-dollar brand is stepping into yet another high-profile venture – this time , a political one . And while Musk’s unpredictability is part of what makes him iconic , it also introduces new uncertainty that investors can’t ignore .
It’s important not to panic – Stock markets often overreact to major news , especially when it involves high-profile figures like Musk . The nearly 7% drop in Tesla’s stock following the America Party announcement was a sharp but emotional response, not necessarily a reflection of the company’s fundamentals .
Tesla’s factories are still running , cars are still selling, and its core technologies- like Full Self-Driving and AI-remain in development . From a business standpoint , nothing broke overnight .
This is a good time for both retail and institutional shareholders to evaluate their risk tolerance.
If you’ve invested in Tesla primarily because of Musk’s vision and leadership, this might be a moment to ask : Is he still as focused on Tesla as he once was? If the answer feels uncertain, diversification might be wise.
Spreading your portfolio across multiple sectors or companies can help soften the blow if Tesla’s volatility continues .
Lastly, stay informed , but filter the noise. Not every tweet or headline reflects long-term reality. Musk has always been a wildcard , but he’s also delivered results no one thought possible . Whether he can continue doing so while building a political movement is still unclear – but for now , shareholders would be wise to remain alert , patient, and cautiously optimistic .