Tesla Stock Drops as Trump Criticizes Musk's New Political Party

Shares in Tesla dropped by 7.6% in premarket trading after CEO Elon Musk announced the formation of a new American political party, leading to criticism from US President Donald Trump. Despite some recovery, Tesla stock opened down 7.6% at the start of regular trading and remained down about 7% in mid-afternoon trading.

Trump expressed disappointment in Musk's recent actions, calling him a 'TRAIN WRECK' and criticizing the formation of a new political party to rival existing ones. Concerns among Tesla investors include potential cuts to EV subsidies and distractions for Musk.

The feud between Trump and Musk began in early June over policy disagreements, with Musk forming the 'America Party' to promote freedom. Tesla's stock faced its biggest single-day loss since June 5, reflecting the impact of the ongoing controversy.

Tesla has seen challenges with declining sales and increased competition, with Musk's political involvement adding further complexity. Musk's decision to step down from his government role was seen as a positive move for his companies, but his renewed political activities have reignited tensions and affected Tesla's stock performance.