Tech billionaire Elon Musk has officially announced the formation of a new political group, the America Party, intensifying his growing rift with former President Donald Trump and sending ripples through both political and financial circles. The announcement, made over the weekend via Musk’s social media platform X, comes just days after a public spat with Trump over government spending and political direction.
Once political allies, Musk and Trump have now turned vocal critics of one another. Musk, who previously supported Trump’s 2024 campaign and served on government advisory councils, accused the former president of reckless fiscal policies, particularly criticising what he referred to as the “insane spending bill.” In retaliation, Trump took to Truth Social, calling Musk a “train wreck” and claiming he was “off the rails.”
In response, Musk declared his independence from both major parties, stating, “The America Party is formed to give you back your freedom.” He followed this statement with a pledge to contest key congressional races, specifically aiming for “two or three Senate seats and eight to ten House seats” in the coming election cycles.
However, the billionaire’s political ambition may be more challenging than it appears. Experts point out that establishing a viable third party in the U.S. is a monumental task, with barriers such as ballot access, funding, and national infrastructure. Historically, third-party movements like the Libertarian or Green Parties have taken decades to build national visibility and secure ballot status in all 50 states. According to legal analysts, Musk will likely face expensive and complex legal hurdles if he hopes to field candidates as early as the 2026 midterms.
The political developments have also raised alarms in the financial markets. On Monday, Tesla’s stock dropped nearly 7%, falling to $293.94 per share and erasing over $6 billion in market value in a single trading day. Analysts attributed the plunge to investor concerns over Musk’s growing political distractions. Dan Ives of Wedbush Securities warned that Musk’s political ventures could negatively affect Tesla’s long-term strategy and execution, particularly as the company faces stiff competition in the electric vehicle and AI markets.
“Every minute Elon spends on politics is a minute away from solving Tesla’s production issues, rolling out full self-driving, and delivering on robotics,” Ives said.
Tesla stock has been volatile throughout 2025, already down nearly 30% year-to-date. With the company’s second-quarter earnings report scheduled for July 23, investors are on edge. Musk’s political detour could further erode confidence if earnings fall short of expectations or if he signals continued focus on the America Party over core Tesla operations.
Despite these concerns, Musk’s new party has gained traction among some of his supporters online, particularly among libertarian-leaning and independent voters disenchanted with traditional politics. A recent poll on X showed overwhelming support – over two-thirds – for the idea of Musk forming a new political party.
Still, turning online enthusiasm into electoral success is another matter entirely. Political scientists warn that without clear policy proposals, grassroots infrastructure, or credible candidates, the America Party risks being more symbolic than substantive in its early stages.
For now, Musk’s latest venture marks a sharp turn in both American politics and corporate leadership. As he doubles down on his commitment to what he calls a “freedom-driven” political movement, the world will be watching to see whether Musk can truly disrupt Washington the same way he disrupted Silicon Valley – or whether his political ambitions will backfire and cost him dearly in the boardroom.
