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Tesla shares tumbled after the electric-car maker’s chief executive Elon Musk said he would form a new political party, escalating a feud with US President Donald Trump.
Shares in Tesla were down 7.4 per cent during Monday lunchtime trading on Wall Street, taking its decline to about 18 per cent over the past five weeks, as Musk has repeatedly clashed with Trump.
Musk left the administration in May as his time as a “special government employee” with the so-called Department of Government Efficiency (Doge) came to an end and after the pair fell out over the president’s signature tax and spending bill.
Tesla’s market capitalisation has dropped by more than $230bn since Musk left the administration in late May. At about $915bn on Monday, its valuation has fallen from a peak in mid-December of more than $1.5tn.
In his latest broadside against Trump, Musk over the weekend announced that he would form a new political party, which he said was needed to combat the “one-party system” undermining US democracy.
Daniel Ives, an analyst at Wedbush, said Musk’s apparent decision to “dive deeper into politics . . . is exactly the opposite direction that Tesla investors [and] shareholders want him to take during this crucial period for the Tesla story”.
Trump hit out at Musk’s plans for a new party, writing on his Truth Social platform that he was “saddened to watch Elon Musk go completely ‘off the rails’ essentially becoming a TRAIN WRECK over the past five weeks”.
The bitter public feud marks a spectacular unravelling of the previously close ties between the two that were forged as the billionaire helped bankroll Trump’s return to the White House.
Trump then installed Musk, who runs Tesla and SpaceX, as head of Doge and gave him the job of finding trillions of dollars of savings across government.
