Why Tesla Share Is Falling Today ? Musk American Party

Tesla shares fell sharply in today’s trade, dropping over 7% as per data on Google Finance. The sharp decline came after Elon Musk announced plans to launch a new political outfit in the US, raising fresh concerns about distraction from Tesla’s core business. The fall builds on several recent headwinds ranging from regulatory probes and weak delivery figures to growing backlash against the brand in key markets.

Musk’s "America Party" triggers TSLA stock fall

The immediate trigger for today’s fall was Musk’s confirmation that he plans to launch the “America Party” ahead of the US presidential elections. Investors reacted negatively to the news, fearing that his growing involvement in political matters could become a long-term distraction from Tesla’s strategic priorities, especially as the company faces increasing competitive and operational pressures.

This development follows Musk’s recent public fallout with former President Donald Trump. That episode had already unsettled investors, as analysts warned that a worsening relationship with Trump-aligned policymakers could lead to the loss of regulatory goodwill. One estimate suggested Tesla could lose up to $3.2 billion annually in EV subsidies if political relations deteriorate further.

Mark Cuban also offered to help Elon Musk’s new “America Party” get on ballots, while Anthony Scaramucci said his DMs are open to discuss their involvement

Robotaxi probe raises safety and execution risks

There is also an active investigation by US safety regulators into Tesla’s robotaxi program. In late June, the National Highway Traffic Safety Administration (NHTSA) began reviewing the company’s limited fleet of self-driving robotaxis deployed in Austin, Texas. Early videos showed inconsistent driving behavior, prompting questions about the safety and readiness of Tesla’s autonomous driving systems.

While the robotaxi segment represents a small part of current revenues, it has been positioned by Musk as a key pillar of Tesla’s future growth. The probe risks slowing down the rollout and weakening investor confidence in Tesla’s innovation pipeline.

Europe sales slump and delivery declines add to the pressure

Operationally, Tesla has been struggling to maintain momentum in key global markets. In May 2025, Tesla’s sales in Europe fell by nearly 28% year-on-year, even as the overall battery electric vehicle (BEV) market grew by 27%. Tesla’s market share in Europe dropped from 1.8% to just 1.2% over the same period.

This poor performance comes alongside a broader slowdown in deliveries. In Q2 2025, Tesla delivered approximately 444,000 vehicles, its second straight quarter of declining volumes. This marked the first time in years that the company has reported back-to-back delivery drops, raising concerns about demand saturation and increased competition, particularly from Chinese automakers.

Brand under fire amid global backlash

Since early 2025, Tesla has also been the target of a growing protest movement known as the “Tesla Takedown.” Activists have accused the company and its CEO of fostering a toxic workplace culture, promoting polarizing views, and weakening democratic institutions. The campaign has led to vandalism at showrooms, boycott calls, and public divestment appeals in the US and parts of Europe.

While the financial impact of the protests is hard to quantify, the reputational risk is significant. For a company that relies heavily on brand perception and consumer loyalty, the continued backlash could hurt long-term demand, especially in Western markets where ESG considerations influence institutional capital.

What’s Ahead for Tesla

Today’s sharp fall in Tesla’s stock reflects growing investor discomfort with both leadership distractions and operational underperformance. While Elon Musk’s vision continues to define Tesla’s identity, his increasingly political positioning is now becoming a material risk factor for the stock. Combined with slowing deliveries, regulatory scrutiny, and mounting brand challenges, the pressure on Tesla appears to be coming from multiple directions.

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