.png){kind=logo}
Tesla shares fell nearly 7% on Monday, erasing $68 billion in market capitalization in a single day. The sharp fall came after CEO Elon Musk unveiled his new political venture, ‘America Party’. Thus escalating tensions with US President Donald Trump and raising concerns about his focus on Tesla.
The electric vehicle giant’s stock closed at $293.94 on Nasdaq, down 6.8%. It marks one of the worst single-day performances of the stock in 2025. The drop follows a year-to-date decline of 27% in Tesla stock.
The latest plunge in Tesla’s stock value followed a very public spat between Musk and Trump. Musk criticized Trump’s tax and spending policies and announced his own party. In retaliation, the former president called the move ‘ridiculous.’
A prior exchange between the two in June had already resulted in a massive $150 billion loss in Tesla’s market capitalization in one day. The widely covered feud has led to fears of political sabotage, including the threat of ending billions in federal subsidies to companies led by Musk.
Tesla CEO’s political pivot is also raising questions about the company’s board oversight. Chair Robyn Denholm recently denied reports suggesting that the board was seeking Musk’s replacement. However, the ongoing volatility could revive those concerns.
Analysts now believe the EV giant could lose over $80 billion in market valuation if the current downtrend continues. “Investors are worried about distractions,” said Jed Dorsheimer, an equity analyst quoted by Bloomberg. He further explained, “The company’s strategic focus is being diluted by Musk’s personal ambitions.”
The Tesla stock crash has also hit its CEO’s fortune. According to the Bloomberg Billionaires Index, Musk lost $15.3 billion on July 7 alone. His year-to-date loss now stands at $86.7 billion, bringing his current net worth down to $346 billion.
Despite remaining the world’s richest person, Musk is facing rising criticism now over his extreme decisions. Echoing the sentiment, US Treasury Secretary Grace Bessent recently commented that Musk should ‘focus more on business than politics.’
The automobile company’s recent struggles have also affected customer loyalty. As Musk wades deeper into divisive political waters, some consumers have begun to reconsider their association with the brand. With declining EV sales and fierce competition from legacy automakers and Chinese rivals, investor patience is wearing thin.
Tesla now faces a critical period in which it must reassure shareholders, protect its brand, and refocus on its fundamentals. Whether that’s possible with Musk’s full attention divided between business and political ambitions remains uncertain.
Also Read:Elon Musk’s Refocus to Business: Will Tesla and SpaceX Recover from Political Backlash?
