Headwinds Ahead For Tesla Stock? Musk's 'America Party' Plans Shake Retail Confidence After Q2 Deliveries Miss

Tesla Inc. (TSLA) could face renewed pressure this week as CEO Elon Musk's latest political pivot raised fresh concerns about his focus on the EV maker.

Musk, the world's richest man, announced the formation of the "America Party" on X Saturday, claiming it would "give Americans back your freedom."

"By a factor of 2 to 1, you want a new political party and you shall have it!" Musk added on Sunday, referencing a poll he conducted the day before.

Despite some social media speculation, the party has not been registered with the Federal Election Commission (FEC), and Musk has swiftly debunked those claims.

While initially suggesting the party would not back a presidential candidate in 2028, Musk later said that "it's not out of the question." For now, Musk said the focus would be on flipping "2 or 3 Senate seats and 8 to 10 House districts" over the next 12 months.

The move comes amid Musk's renewed public feud with President Donald Trump, which escalated after the billionaire entrepreneur publicly opposed Trump's "big, beautiful bill," claiming it would increase the national debt by a record $5 trillion. 

Trump, however, claims Musk is sour over the cuts to EV subsidies in the bill, which was signed into law by the president at an outdoor ceremony on the Fourth of July holiday.

Details about Musk's new party remain scarce, although the Tesla CEO appeared to endorse a suggestion generated by Grok (the AI chatbot from his artificial intelligence venture) to host an inaugural congress in Austin, Texas, in late August 2025. The AI cited Austin's "central location, innovative vibe, and timing before elections" as factors.

Tesla moved its legal headquarters to Austin in 2021 following Musk's vocal criticism of California's regulatory and tax policies.

Musk also said his party would embrace Bitcoin as “fiat is hopeless.”  

On Stocktwits, retail sentiment toward TSLA turned increasingly bearish late Sunday, as it became the top-trending ticker amid a 116% jump in 24-hour message volume.

"Rest assured Trump is going to destroy this company now," said one user.

"Tanking pre-market because the CEO will not keep his mouth shut," posted another watcher.

"Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction investors/shareholders want him heading during this crucial period for the Tesla story," wrote Wedbush analysts led by Dan Ives in a note Sunday.

"With the autonomous future ahead and the AI Revolution in full force, Musk/Tesla do not need to keep poking the bear," the note warned, adding that Trump could create more hurdles for Musk, Tesla, and SpaceX if this political battle intensifies heading into the 2026 midterms.

Ives stressed that Tesla needs Musk focused as CEO — "its biggest asset" — rather than "heading down the political route yet again."

"It would also not shock us if the Tesla Board gets involved at some point given the political nature of this endeavor depending on how far Musk takes it."

Despite the concerns, Wedbush reiterated its 'Outperform' rating on Tesla and maintained its $500 price target, pinning hopes on Tesla’s AI future. "But clearly, this is not the news we want to see as it adds another perceived overhang to the stock."

Investor confidence had already taken a hit earlier this year, as Musk visibly devoted more time to Trump's administration, leading the Department of Government Efficiency (DOGE) initiative to slash federal spending. Following severe backlash and plunging sales at Tesla, Musk stepped down from the role, pledging to refocus on his company.

Tesla reported second-quarter deliveries of 384,000 units last week, up 14% quarter-over-quarter but down 13% year-over-year, missing Wall Street expectations. However, the stock held up as some analysts noted the results were better than their forecasts and reiterated upside potential driven by Tesla's robotaxi ambitions and progress in Full Self-Driving (FSD) technology.

Still, Tesla remains one of the worst performers in the S&P 500 and among the so-called "Magnificent Seven" tech stocks, with year-to-date losses exceeding 21%.

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