Tesla shares plunged 6.8% on Monday, closing at $293.94 on Nasdaq—losing over $68 billion in market capitalization—following CEO Elon Musk’s announcement to launch the “America Party”, fueling investor anxiety about his political ambitions.
This sharp decline marks one of Tesla’s worst single-day drops this year, compounding a 27% decline year-to-date as investors worry Musk’s political pivot may distract from Tesla’s core business and hurt its appeal to car buyers.
Additionally, the steep sell‑off clipped Musk’s personal fortune, wiping out approximately $15.3 billion in his net worth on July 7. His total wealth now hovers near $346 billion, according to Bloomberg’s Billionaires Index. Year‑to‑date, Musk has lost nearly $86.7 billion in net worth.
The stock drop reveals growing investor concerns over Musk’s political entanglements. U.S. President Donald Trump publicly derided the America Party as “ridiculous,” and analysts warn that such distractions may undermine Tesla’s strategic focus during a critical period.
Tesla’s board, chaired by Robyn Denholm, faces pressure to recalibrate Musk’s ambitions—though insiders, including Denholm, have downplayed any rumors of ousting him. Some estimates suggest further losses could push the company’s market cap down by another $80 billion.
As Musk continues to balance politics and profits, all eyes are on whether the Tesla board will step in or let the risk play out.
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