Elon Musk plunges in stock market, changes course, and his new plan aims to disrupt everyone

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After a turbulent year of tanking Tesla shares, erratic behavior, and growing tension with Donald Trump, Elon Musk has unveiled his boldest move yet: the launch of a new political party called the American Party, with an eye on the White House.

The announcement, made Saturday via X—Musk’s own social media platform—sent shockwaves through the political and financial worlds. While he hasn’t shared any details about his platform or policies, the billionaire’s move is already triggering strong reactions.

Musk’s political pivot: What’s behind the launch of the American Party?

For months, Musk had taken a backseat from his political ambitions—at least publicly. But the billionaire’s frustrations seem to have reached a boiling point.

“When it comes to bankrupting our country with waste and graft, we live in a one-party system, not a democracy,” Musk posted. ”Today, The America Party is formed to give you back your freedom,” Elon Musk posted on his X account.

By a factor of 2 to 1, you want a new political party and you shall have it!

When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy.

Today, the America Party is formed to give you back your freedom. https://t.co/9K8AD04QQN

— Elon Musk (@elonmusk) July 5, 2025

Shortly after the announcement President Donald Trump lashed out on Truth Social, writing:

“I am saddened to watch Elon Musk go completely “off the rails,” essentially becoming a TRAIN WRECK over the past five weeks. He even wants to start a Third Political Party, despite the fact that they have never succeeded in the United States.”

The falling-out between Musk and Trump marks a major turning point. The two once had a surprisingly close alliance, especially when Musk briefly served as head of the Department of Government Efficiency, a short-lived advisory role. But since stepping down, tensions have only escalated.

Investors are losing patience—and Tesla is paying the price

The political gamble comes at a precarious moment for Musk’s business empire.

Last week, Tesla’s stock dropped nearly 8% on the Nasdaq Composite. Analysts tie the plunge not only to weaker sales, but also to Musk’s increasing involvement in political controversies and cryptocurrency disruptions—especially his controversial changes to Dogecoin governance.

Adding to the concern: CNBC reports that many Tesla investors are frustrated by Musk’s growing political ambitions, which they believed he had abandoned earlier this year.

Falling orders, rising competition: Tesla faces headwinds

Tesla’s troubles don’t end with Wall Street. Orders reportedly dropped 14% last week, deepening a downward trend that began in Q1.

Meanwhile, Musk’s feud with China is intensifying. Chinese tech manufacturers are flooding the market with cutting-edge EVs and gadgets—at significantly lower prices. Tesla, once the unrivaled king of innovation, now finds itself outpaced and outpriced in one of its key markets.

What’s next for Musk—and the American Party?

So far, Musk has offered no clear roadmap for the American Party. He says the goal is to disrupt the traditional Republican and Democratic power structures by gaining traction in key battleground states and eventually securing seats in Congress.

Whether this bold strategy will work—or deepen Musk’s woes—is anyone’s guess.