Elon Musk’s political move wipes $68 billion off Tesla value

Musk’s deepening political ambitions have intensified investor concerns that his focus is drifting from Tesla’s core operations, already under strain from weakening EV demand and rising global competition, potentially clouding the company’s strategic direction

Tesla shares took a sharp hit on Monday (July 7) following CEO Elon Musk’s surprise announcement of launching a new political outfit, sparking renewed investor concerns about his focus and the company’s future. The electric vehicle (EV) giant’s stock fell 6.8% to close at $293.94 on Nasdaq, erasing over $68 billion in market value in a single trading session.

Musk over the weekend revealed plans to launch the “America Party” amid a public spat with US President Donald Trump over tax and spending policies. Trump, a former ally of Musk, dismissed the move as “ridiculous,” escalating a feud that has added political risk to Tesla’s volatile market trajectory.

The announcement has amplified fears that Musk’s growing political ambitions could further distract him from day-to-day operations at Tesla, already facing pressure from slowing EV demand and intensifying global competition. Investors are increasingly concerned that Musk’s high-profile engagements outside Tesla are overshadowing the company’s strategic direction.

According to analysts, the latest decline could result in Tesla losing over $80 billion in valuation if the negative sentiment continues. Jed Dorsheimer, an equity analyst, reportedly noted that Musk’s political moves are adding “unnecessary risk” to an already challenging business environment.

Musk’s wealth takes a hit

The fallout also had a significant impact on Musk’s personal fortune. As per Bloomberg’s Billionaires Index, he lost $15.3 billion on Monday alone. His year-to-date net worth has now dropped by over $86 billion, though he remains the richest person in the world with an estimated $346 billion.

This isn’t the first time political controversy has affected Tesla’s market standing. In June, an earlier clash between Musk and Trump reportedly contributed to a single-day market value loss of $150 billion for Tesla.

The company’s board, led by Chair Robyn Denholm, is under renewed scrutiny. While previous reports about considering a CEO replacement were denied, the latest developments may reignite internal debates about governance and leadership stability.

With Tesla’s stock down nearly 27% in 2025 so far, analysts warn that Musk’s continued political involvement may further strain investor confidence and hinder the company’s long-term growth prospects.