Why is Tesla down today (July 8)?
Tesla loses $68B in market cap after Elon Musk launches America Party
Tesla Inc. (NASDAQ: TSLA) saw its market capitalization shrink by $68 billion on Monday after CEO Elon Musk revealed the formation of the “America Party.”
The announcement sent TSLA shares plunging 7% to $293.94, marking one of the steepest declines this quarter. Musk’s political move reignited tensions with President Donald Trump, who dismissed the initiative as “ridiculous” and warned that third-party efforts bring “total disruption.” This political detour arrived just as Tesla confronts business headwinds, including its first annual sales decline and missed Q2 delivery expectations. Investor unease over Musk’s attention being split between politics and Tesla’s operations added fuel to the sell-off.
Analysts warn of growing investor fatigue with Musk’s distractions
Wall Street analysts expressed concerns that Musk’s political aspirations are distracting from Tesla’s core challenges. Dan Ives of Wedbush Securities stated that Musk’s increasing political involvement is “exactly the opposite direction” shareholders want during a critical time for the company. Tesla’s deliveries fell 13.5% year-over-year in Q2, and the company recently lost access to U.S. EV tax credits—once a major boost to its bottom line. Meanwhile, Chinese EV giant BYD surpassed Tesla in global sales, intensifying competitive pressures. With these mounting issues, many investors fear that Musk’s political ambitions are creating unnecessary volatility in Tesla’s valuation.
Dmytro Kharkov cites five major risks facing Tesla
Analyst Dmytro Kharkov believes Tesla’s stock performance reflects more than political drama—it signals growing structural vulnerabilities. He identified five key concerns: Musk’s political involvement, declining vehicle deliveries, loss of EV subsidies, mounting pressure from rivals like BYD, and negative brand perception. Kharkov argued that Musk’s behavior is alienating shareholders seeking stability and leadership focus.
Kharkov stated:
"Fundamentally, Tesla remains strong, but political and regulatory factors are favoring the bears. I expect high stock volatility in both directions over the coming weeks."
However, he also pointed to technical indicators suggesting TSLA could rebound toward $520 if operational challenges are addressed. “Investors want clarity, not chaos,” Kharkov said, emphasizing the need for Musk to prioritize Tesla’s long-term business fundamentals.
Recently we wrote that Tesla stock is trading at $293.94, down 6.8% over the past 24 hours, marking one of its steepest single-day declines in recent months.
