Wall Street punishes Tesla as Musk starts an anti-Trump political party: 'Off the rails'
Shares in the EV maker slid as much as 7 percent in Monday's pre-market trading, just days after Musk revealed he's launching a new political party, the 'America Party,' and reigniting his feud with former boss President Donald Trump.
'Investors are worried about two things,' Neil Wilson, a UK investor strategist at Saxo Markets, said. 'One is more Trump ire affecting subsidies and the other, more importantly, is a distracted Musk.'
The Tesla CEO, who once led Trump's Department of Government Efficiency, called out the administration again over its recently-passed 'One Big, Beautiful Bill.'
Musk has critiziced the sweeping package for its projected $5 trillion price tag, that is likely to massively increase the federal deficit.
He said it is in response to the recently-signed 'One Big, Beautiful Bill,' which is expected to add an estimated $3 trillion to $5 trillion to the federal deficit.
'What the heck was the point of DOGE if he's just going to increase the debt by $5 trillion,' Musk posted on X.
President Trump fired back at his former advisor on his own platform, Truth Social.
'I am saddened to watch Elon Musk go completely "off the rails," essentially becoming a TRAIN WRECK over the past five weeks,' the President wrote.
Until recently, Musk had promised to retreat from politics and refocus on Tesla.
That pledge sent shares soaring in May, with investors hopeful the company could finally stabilize after months of slumping EV sales and missed product deadlines.
This is an important year for Tesla. Automotive industry analysts have been worried about EV sales because the Republican bill ends the tax credit handed to EV consumers.
Meanwhile, the company is rolling out its long-delayed self-driving technology, with the first automonous vehicles reaching Texas roads in late June.
But investors have watched as tensions between Trump and Musk, two men who forged an improbable political coalision in the 2024 Presidential election, cratered that once sky-high stock price.
In late June, Musk said the Republican tax bill would send the country into 'DEBT SLAVERY,' vowed to bankroll primary challenges against Trump-endorsed candidates.
At the time, Trump hit back with a series of threats, suggesting the federal government could launch investigations into Musk's companies.
Tesla's stock price has plunged twice, largely due to his increasingly heated rhetoric against his former political ally
Over the weekend, Musk said he created a new political party - but the businessman would have to file paperwork with elections officials
He even hinted at deporting Musk, who was born in South Africa.
That clash sent Tesla's stock on a similar downward trajectory.
Monday's market drop mirrors the fallout from that earlier spat, with shares ultimately ending that day down more than 5 percent.
Still, analysts aren't concerned. They believe investors have gotten used to this type of price fluctuation.
'For Tesla investors, volatility is a way of life,' Bret Kenwell, an investment analyst at eToro, told DailyMail.com.
'While the path has been bumpy, it's been rewarding, with Tesla still sporting a market cap of almost $1 trillion.'
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NBC News
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BBC News
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