Elon Musk's new ‘America party' is ‘hurting' his company; Tesla Bull Dan Ives says, ‘Very simply…'
stock fell approximately 7% after the EV-making company's CEO, Elon Musk, announced his plans to form a new political party. This decline cost the company 68 billion in a day to become the most significant single-day drop since June 5, when it experienced a 14% decrease during Musk's public dispute with US President Donald Trump. Last week, Musk stated that the proposed party would be named the 'America Party.' He suggested it could focus on securing 'just 2 or 3 Senate seats and 8 to 10 House districts,' aiming to serve as a deciding vote on contentious legislation and ensure it aligns with "the true will of the people."
Read what Tesla Bull Dan Ives said about Elon Musk's political involvement
In a recently published research note by Tesla bull Dan Ives (seen by CBS MoneyWatch), the investor explained:
'Very simply, Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story. While the core Musk supporters will back Musk at every turn, no matter what, there is a broader sense of exhaustion from many Tesla investors that Musk keeps heading down the political track.'
Musk's decision to launch the America Party comes at a challenging moment for Tesla. The company's electric vehicle sales dropped by over 13% between April and June compared to the same period last year.
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In Europe, sales plunged nearly 50% in April, despite overall growth in the region's electric vehicle market, as per data released in May by the European Automobile Manufacturers' Association.
Musk's involvement in politics has previously raised concerns among investors. Earlier this year, his close work with the Trump administration on the 'Department of Government Efficiency' (DOGE) was seen by some as potentially detrimental to Tesla's brand image. He distanced himself from DOGE in May, a move that had a positive impact on Tesla's stock. However, his renewed involvement in politics is now causing concern among investors.
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