New York, July 8, (V7N) — Tesla Inc. (TSLA.O) saw its shares fall by nearly 8% on Monday following reports that CEO Elon Musk is preparing to launch a new political party in the United States. The development has raised fresh concerns among investors about Musk’s long-term commitment to Tesla, as the electric vehicle (EV) giant faces growing challenges in an increasingly competitive and contracting market.
 
According to industry analysts and investor reports, the decline in Tesla’s stock value reflects anxieties over Musk's divided focus. In recent months, the company has been grappling with declining sales, shrinking market share, and stiff competition from both U.S. and Chinese EV manufacturers. Additionally, delays in the rollout of Tesla’s next-generation vehicles and slower-than-expected progress in full self-driving technology have added pressure to the company’s outlook.
 
Musk’s move into politics—while not entirely unexpected—has intensified investor unease. In a series of posts over the weekend, Musk confirmed that he is in the early stages of forming a centrist political party focused on “technological advancement, free speech, and post-partisan governance.” While details remain scarce, sources close to Musk suggest that he plans to officially announce the party later this year ahead of the 2026 midterm elections.
 
“This is a pivotal moment for Tesla,” said Claudia Herrera, a senior analyst at FutureMobility Research. “Investors want to see leadership fully dedicated to navigating through a difficult sales environment and intensifying global competition. Elon Musk’s political ambitions risk undermining that confidence.”
 
Tesla’s board has not commented on the matter, but several institutional investors have expressed concern. Some have called for greater executive accountability and transparency regarding Musk’s time commitments across his ventures—including SpaceX, X (formerly Twitter), Neuralink, and now a political initiative.
 
The company’s next earnings report is due in late July, and analysts expect further scrutiny on Musk’s role and the potential impact of his political activities on Tesla’s operational strategy.
 
Despite the drop, Tesla remains one of the most valuable automakers in the world. However, its market capitalization, once above $1 trillion, has slipped significantly since 2024, reflecting broader investor skepticism about future growth under Musk’s evolving priorities.
 
As Musk expands his personal and ideological influence, Tesla faces a critical test: Can the company stay focused and innovative in a volatile EV market while its leader turns toward the political arena? Investors, regulators, and the public will be watching closely.
 
END/WD/AJ/