Tesla Inc., headquartered in Austin, Texas, USA, witnessed a sharp decline in its stock price, falling 6.8% and wiping out over USD 68 billion in market capitalization. The drop came after CEO Elon Musk announced the launch of a political party, triggering investor concerns over distraction from Tesla’s core business. Musk’s personal wealth also plunged by USD 15.3 billion in a single day, as Tesla’s stock continues a 27% decline year-to-date.
Tesla Inc., the electric vehicle giant headquartered in Austin, Texas, suffered one of its steepest stock plunges of the year, losing over USD 68 billion in market value in a single day. On July 7, the company’s stock closed down 6.8% at USD 293.94 on the Nasdaq following CEO Elon Musk’s announcement of his new political venture, the ‘America Party’.
The sharp fall, which marked a 27% decline in Tesla’s stock price for 2025, has been tied to mounting investor anxiety over Musk’s increasing involvement in politics, potentially diverting attention from Tesla’s operations and strategic growth. Musk, already facing challenges in Tesla’s core EV market, now confronts pressure from both investors and political circles.
Elon Musk, the world’s richest man, saw his net worth fall by USD 15.3 billion in a single day, according to the Bloomberg Billionaires Index. Year-to-date, his personal fortune has shrunk by USD 86.7 billion, bringing his net worth down to USD 346 billion.
Musk unveiled the new political party over the weekend after a public fallout with US President Donald Trump regarding the federal tax and spending bill. Trump labeled Musk’s initiative “ridiculous,” a comment that further fueled investor concerns.
Despite the plunge, Tesla’s board, chaired by Robyn Denholm, has dismissed rumors about leadership changes. In May, Denholm publicly denied reports from the Wall Street Journal that claimed board members were considering replacing Musk as CEO.
Tesla’s share tumble also led analysts to warn that the company could lose over USD 80 billion in market valuation if downward momentum continues. Bloomberg cited equity analyst Jed Dorsheimer, who emphasized that the political detour could severely impact Tesla’s standing with customers and market sentiment.
Tesla’s ongoing decline highlights growing scrutiny over CEO accountability and the effects of public figures straddling corporate and political spheres. With critical milestones ahead in EV innovation and delivery targets, investors remain cautious about how Musk’s political ambitions may shape the future of Tesla Inc..
