The Tesla share took another dive on Monday, as CEO Elon Musk announced the formation of a political party in the United States. Shareholders would prefer Musk to ensure that more Teslas are sold again.
The Tesla share lost almost 8 percent of its value on a dramatic stock market day on Monday, equivalent to around 70 billion euros. On Tuesday around 5:00 PM Dutch time, a cautious recovery was visible with a 2.5 percent gain. But a Tesla share is still 20 percent less valuable than at the beginning of 2025. Shareholders do not seem happy with Musk’s America Party.
With this new party, Musk wants to challenge Donald Trump’s Republican Party. At the end of May, after several months as an advisor to the Trump administration, he had promised Tesla shareholders that he would pay more attention to the car brand and its struggling sales.
“It does not seem like he is keeping his promise,” says Erik Slaaf, sector specialist mobility for ING. The political plans also mean that Trump can make things difficult for Tesla with his power. Because Trump and Musk are no longer friends.
The car brand already has enough problems, as global sales decreased by 13 percent this year. In Europe, it is even worse; in the Netherlands, new Tesla registrations halved in the first half of 2025. In Germany, there was even a decrease of 60 percent.
According to Slaaf, the declines are partly due to Musk’s political work and opinions in the first months of Trump’s presidency, when the Tesla boss was still a loyal ally. “I think Tesla sales will fall further, now that Trump’s policy makes electric cars less attractive to Americans,” he says.
Trump Cuts Subsidies for Electric Cars
One of the reasons Musk turned against Trump after a bromance is that the president is cutting subsidies for sustainability, which includes electric vehicles (EVs). For example, new EV buyers will miss out on 7,500 dollars (approximately 6,400 euros) from the government from October if they purchase a Tesla.
Musk initially reacted indifferently to the cut, but later acknowledged that it affects Tesla sales. Trump also hinted on social media earlier this month that he was looking into the tax benefits that Tesla receives as a company. “The quarrel is not doing the brand any good for the time being,” says Slaaf.
Meanwhile, shareholders see billions of dollars evaporate. The Tesla share has already lost 35 percent of its value this year. With the establishment of the America Party, Musk is dragging the car brand further and further into American politics.
‘Musk is too connected to Tesla’
Is it time for the Tesla board to look for a new CEO to boost the image? That will be difficult. “He is too connected to Tesla,” says Manuel Lokin, professor of corporate law at Utrecht University.
In the US, advisors elected by shareholders (the so-called board) address the CEO if they are dissatisfied. They can then suspend or dismiss him. “But the Tesla board consists of loyal allies of Musk,” says Lokin. “His own brother Kimbal Musk is even on the board. That body is supposed to be independent of the CEO, but it actually isn’t at Tesla.”
Elon Musk is the largest shareholder of Tesla and therefore has the heaviest vote when new members of the board are elected.
More harassment from Trump expected
Slaaf points out that Tesla sales in the US have fallen less than in other parts of the world. The American brand still has enough fans in its own country. Trump cannot simply change that, although according to Lokin he can do a lot against Tesla and Musk’s other companies. “There are more subsidies and government contracts that the president can stop. And if he really wants to hurt Tesla, he will come up with stricter rules against autonomous driving. That is Tesla’s vision for the future.”
Tesla invests heavily in the technology of self-driving cars and wants to start a self-driving taxi center with the Cybercab in the coming years. Shareholders see potential in that and have therefore invested heavily in the brand.
Electric driving is still encouraged among American civil servants. That could be another way for Trump to harass Musk. “He can even forbid civil servants from choosing a Tesla as a company car.”
That unpredictability makes Tesla shareholders nervous. They had hoped that Musk would keep a low profile politically when he resigned from his government position this spring. But the America Party is a project that will take years. Tesla may therefore suffer from the quarrel between Musk and the president for Trump’s entire term.