To create a third political party, Elon Musk’s push is once again risking its business empire, questioning how his political ambitions align with the interests of his companies.
After Tech billionaire started its new America party in the weekend, Tesla saw Shares tumble Monday – The latest opportunity in recent months in which the electric vehicle (EV) manufacturer has taken a hit on the functions of his CEO in the political field.
And President Trump has renewed his suggestion that the administration can target various contracts and subsidies of Kasturi, leaving SpaceX to the weaker people.
“This turn is probably one of the biggest strategic errors I have ever seen,” Ross Garbar, a long -time Tesla investor and the CEO of the Gerbar Kawasaki Wealth and Investment Management told Hill.
“It puts them now [Musk and Trump] In a way, in a direct contest that will only hurt Tesla even more, ”he said.
Tesla’s stock rose 7 percent on Monday morning when the markets opened and investors took stock of Musk’s decision to start their US party.
The CEO of Tesla has repeatedly swims the idea of creating a third party since the President fell with the President last month. As the two people fought their proposal last week over Trump’s comprehensive tax and spending the bill, Musk repeated his proposal.
After voting for their followers on their social stage X, Musk announced on Saturday He was moving forward with plans for the US party.
“When it comes to insolvency to our country with waste and graft, we live in one-sided system, not in democracy,” he wrote. “Today, the US Party is created to give you its freedom back.”
Musk’s decision to move forward in politics is not sitting well with many investors, who feel relieved from the earlier decision of Tech Mogul to move away from Trump White House.
James Fishback, the CEO and the founder of the investment firm Azoria, said on Saturday that his company was postponing the public list of the Tesla Exchange Traded Fund (ETF) as a result of the announcement of Musk.
“In May, when Elon stepped back from his work in Dogi and attracted his attention to Tesla, we were encouraged.”
“Elon’s announcement today reduces that belief,” he continued.
Tesla’s CEO Trump joined the Trump administration after spending at least $ 250 million to help in promoting Trump’s 2024 campaign. Investors initially seemed optimistic about what the role of Musk for his companies could mean, Tesla’s stock is growing in view of the November election.
However, Musk’s role quickly became a drag on Tesla, leading the government’s efficiency department (DOGE), as the EV manufacturer became a political symbol for his CEO and Dogo’s controversial efforts to cut government expenses and reduce the federal workforce.
Tesla’s stock sank, while the company’s cars and dealerships became a target for peaceful and disastrous protests. EV firm reported a standing 71 percent fall In earnings in the first quarter and A 13 percent dip In the second quarter, in global sales.
Musk finally decided to move away from the White House in May, which was ready to move back to Tesla. But he soon stuck in a quarrel with Trump on the reconciliation bill and enhanced the threats to create a third party, fulfilling his concerns about the federal deficit.
“The last thing you want to see is, the last thing you want to see is,” analyst of Wesbash Securities, Dan Evece. “You want him to focus on all Tesla. And he is eventually creating an enemy in the White House with Trump and Republican.”
“He is taking great risk,” he said. “It puts Tesla in the way of damage. It creates more uncertainty. And there is a possibility that freedom attains any political leg. So it is a defeat-defeat situation from the perspective of many Tesla shareholders.”
Trump and other Republicans have provoked Musk’s push for the third party. chairman Sangering his lifetime colleague As a “train debris” and suggested that he was completely away from the rail. “
Trump said in a post on Sunday afternoon, “He also wants to start a third political party, despite the fact that he has never succeeded in the United States – the system has not been designed for him.”
Trump’s Ire can withstand trouble for Musk’s companies, which are highly dependent on government contracts. The Washington Post analysis in February found that his business empire received at least $ 38 billion in government contracts, loans, subsidies and tax credit.
The President has many occasions Increased possibility To target Tech Mogul’s contracts and subsidies including last week, because Kasturi extended its attacks on Trump and Reconciliation Bill.
“Elon can get more subsidy than any human being in history, so far, and without subsidy, Elon will probably have to return to the shop and home in South Africa,” he wrote on Truth Social, “Maybe we should have noticed a good, difficult, this?”
SpaceX, which has received more than $ 22 billion in government contracts, is particularly unsafe for potential cuts.
Space policy expert Mark Whittington said, “I don’t think it ever does good for anyone like Elon Musk, who is to offend his greatest customer, which is the United States government.”
However, he said that the government is also highly dependent on SpaceX, making it difficult for Trump to cut the company really.
Last month, the threat of Musk to decomposition to SpaceX’s dragon spacecraft, which is responsible for offering astronauts and cargo from the international space station, sent shockwaves through the space community. He eventually went back to the danger.
“SpaceX is so good what it does, launchs things in space, and beyond any of its competitors,” said Whitington. “The federal government cannot do much to him without an option.”
Consequently, SpaceX is in “better position” than Tesla, Ewes said. He argued on Tuesday that the Tesla Board of Directors should “work” to determine the ground rules for Musk.
He suggested that he takes advantage of the legal battle running on the current pay package of Tesla’s CEO, creating an incentive pay package that meets expectations about the amount of musk to spend in the company and establishes a special committee to establish rules for its political efforts.
In turn, the board may increase the polling control of the musc to 25 percent, which would make a landscape to merge with XE for Tesla. Musk ignored the proposal, writing on X, “Shut up, Dan.”
However, Gerbar suspected that Tesla would be stepped into the board.
,[Musk’s] Whatever he wants, he is going to do, and he doesn’t care, “Garbar said.” And the board is not going to do anything about it. ,
