Elon Musk's Political Crusade Risks Sinking Tesla as 'America Party' Plans Ignite Feud With Trump

Elon Musk is facing growing criticism as his plans to create a new political party threaten to derail Tesla, which is already struggling with declining sales and shaken investor confidence.

A New Political Party Amid Tesla Troubles

The billionaire recently announced that he might form the 'America Party' if President Donald Trump's proposed tax and spending bill, known as the Big Beautiful Bill, passes into law. Musk called the bill 'insane' and vowed to launch his party the following day.

Frustrated with both major US parties, Musk has referred to them as a 'uniparty' responsible for ballooning government deficits. He insists his proposed party would champion fiscal conservatism and bring spending under control, although he has shared few specific policy details.

Steep Challenges for Musk's Political Ambitions

Experts warn that creating a successful third party in the US is extremely difficult. Alan Abramowitz, a political science professor at Emory University, noted that successful third-party movements typically emerge from deep-seated public grievances, not just the efforts of a single wealthy individual.

'It is not just some wealthy person deciding they want to start a third party,' Abramowitz said.

In addition to political challenges, strict campaign finance laws pose significant financial obstacles. Former Federal Election Commission chair Lee Goodman explained that Musk cannot fully fund a new national party on his own due to federal contribution limits and complex state ballot access requirements.

Renewed Feud With Trump Adds Risk

Musk's political threats have reignited tensions with Trump, who has hinted that his administration could investigate Musk's companies, including Tesla's government contracts. This escalating feud risks further damaging Musk's public image and Tesla's business prospects.

While Musk has hinted at pulling back on his criticisms, he remains vocal on social media. He recently posted on X: 'So tempting to escalate this. So, so tempting. But I will refrain for now.'

Tesla Sales and Profits Continue to Slide

Meanwhile, Tesla is battling significant operational challenges. Analysts expect the company to report another quarter of declining global sales, with estimates pointing to a 13% drop in deliveries compared to last year.

Tesla shares have plunged 37% from their post-election peak, reflecting investor unease over Musk's focus on politics instead of the company's core business.

Wedbush analyst Dan Ives, a longtime Tesla supporter, called the Musk-Trump saga a 'soap opera' that is dragging down Tesla's stock. 'Tesla investors want Musk to focus on driving Tesla and stop this political angle,' Ives said. 'Being on Trump's bad side will not turn out well, and Musk knows this.'

Mounting Problems Beyond Sales

Tesla's problems extend beyond declining sales figures. The company reported a 71% drop in net income in the first quarter, has faced protests at showrooms, and is grappling with waning interest in models like the Cybertruck.

Additionally, Tesla relies heavily on selling regulatory credits to remain profitable. If Trump's spending bill passes and affects those credits, Tesla could lose a crucial revenue stream.

Investors Urge Musk to Refocus

As Musk intensifies his political battles, investors are urging him to refocus on Tesla. The company faces tough competition in the electric vehicle market and needs stable leadership to navigate regulatory changes and shifting consumer preferences.

Musk's decision to prioritise politics over business has left many wondering if Tesla's future is at risk. As the next earnings report approaches, shareholders and fans alike are watching closely to see whether Musk will choose to return to focusing on the business that built his fortune — or continue down a political path that threatens to undermine it.