Elon Musk may be the richest man in the world, but his deepening rift with President Donald Trump may put his empire into serious jeopardy.
Tesla shares reportedly fell sharply again Monday after Musk said he’d launch a new political party, the America Party, and suggested a strategy of targeting a few key House and Senate seats in 2026.
In the early days of his presidency, Trump and Musk seemed inseparable, but since the announcement of Trump’s “One Big Beautiful Bill,” the two have seemed to have a massive falling out. Musk reportedly denounced the bill as fiscally irresponsible, calling it a disgusting abomination.
The feud escalated in June when Musk publicly claimed that Trump’s name appeared in the Jeffrey Epstein files, triggering an explosive backlash. Trump responded by attacking Musk on Truth Social, threatening to strip Tesla and SpaceX of federal contracts and suggesting Musk go back to South Africa.
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Furthermore, Musk’s threat of formation of a new party positions him as a centrist disruptor aiming to challenge the entrenched two-party system. He has criticized both Democrats and Republicans for corruption, inefficiency, and partisan extremism. While his political platform remains vague, Musk has hinted at a technocratic, innovation-driven agenda focused on immigration reform, AI policy, and national debt reduction.
However, all his grandstanding and verbal vitriol towards Trump is costing him money. According to media reports, Musk is personally out nearly $20 billion, at least on paper, since feuding with President Trump last month, and his investors are out more than $100 billion on top of that.
Ivana Delevska, founder of Spear Invest, recently sold off Tesla shares amid mounting risks associated with Musk’s political entanglements: “While the opportunity is outsized the risks are very significant as well,” she wrote Monday. “While the reward potential is clearly here the risks are significant as well.”
Tesla is not the only company that is suffering, Musk’s SpaceX has faced numerous setbacks in the last few months, with his rockets exploding during launch and severely setting back his Mars project, not to mention the serious losses these launch failures signal to his investors.
“We expect that investors are growing tired of the distraction at a point when the business needs Musk’s attention the most and only see downside from his dip back into politics,” William Blair analyst Jed Dorsheimer writes in a research note.
Musk’s sharp break, driven by disagreements over spending, immigration, and ethics, signals a shift from insider to disruptor.
While Musk has always been a polarizing figure, the public feud with Trump has amplified scrutiny from both political and corporate arenas. Trump’s threats to revoke federal contracts for Tesla and SpaceX pose serious financial risks, as these contracts form a significant part of their long-term strategy, particularly in aerospace, defense, and energy.
This fallout signifies a shift in Musk’s identity, from world-changing entrepreneur to high-stakes political actor. Whether he emerges as a visionary leader or a cautionary tale will depend on how he balances innovation with governance, ego with diplomacy, and ambition with accountability in the years ahead.