Tesla shares plunge again as politics, China weigh on Musk
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Elon Musk at the White House. Photo: Chip Somodevilla/Getty Images
Tesla shares fell sharply again Monday, as Elon Musk's split with the Trump administration deepened over his threats to launch a new political party.
Why it matters: Musk is personally out nearly $20 billion since breaking with President Trump last month, and his investors are out more than $100 billion on top of that.
Catch up quick: Over the holiday weekend, Musk said he'd launch a new political party, the America Party, and suggested a strategy of targeting a few key House and Senate seats in 2026.
- Trump posted to Truth Social that Musk had become a "TRAIN WRECK," and Treasury Secretary Scott Bessent — long a Musk foe — told CNN he expected the boards of Musk's companies would be opposed to his activities.
By the numbers: Tesla shares fell about 7% in pre-market trading Monday.
- They're down about 14% since early June, when Musk first publicly blasted the "big, beautiful bill," which quickly spiraled into a full split with the administration.
Yes, but: This coming Sunday is the one-year anniversary of Musk endorsing Trump — and Tesla shares are still up more than 20% since then, even with the recent sharp declines.
The intrigue: Tesla's problems aren't just Musk's politics, though.
- The company reported last week that deliveries fell almost 14% in the second quarter.
- Late Sunday, the Wall Street Journal published a lengthy report on the company's mounting problems in China, noting that its local employees complained its cars were falling badly behind competitors.
- The WSJ story also noted that the Chinese government no longer considered a Musk relationship as much of an asset, given his falling out with Trump.
The bottom line: "Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that most Tesla investors want him to take during this crucial period for Tesla," Wedbush Securities analyst Dan Ives, one of the company's most outspoken supporters on Wall Street, posted to X on Sunday.
