Billionaire Elon Musk is seemingly making good on his threat of creating his own "America Party" political party — and Tesla investors couldn't be more unhappy.

After Congress passed president Donald Trump's so-called "big, beautiful bill" last week — a piece of legislation Musk has called a "disgusting abomination" and "utterly insane" — Musk announced that his new party could focus "on just two or three Senate seats and eight to 10 House districts."

"When it comes to bankrupting our country with waste and graft, we live in a one-party system, not a democracy," Musk tweeted over the weekend. "Today, the America Party is formed to give you back your freedom."

The market clearly isn't convinced: Tesla shares took a nosedive in light of the news on Monday, sliding more than seven percent as the day opened.

Investors in Musk's EV maker had already been highly wary of his political scheming. His latest comments appear to have hit a nerve, inciting fears that the richest man in the world has become far too distracted from effectively leading the company.

The timing couldn't be worse. Musk has already greatly tarnished the company's brand due to his embrace of far-right extremist ideologies, with anti-Musk sentiment leading to cratering sales across the globe and leaving an enormous dent in the company's finances.

The company's long-awaited launch of an autonomous ride-hailing service has also been chaotic — to say the least — showing that Tesla is still a very long way from meaningfully competing with the likes of Waymo.

In May, Musk claimed that he would be taking a step back from politics, which sent Tesla's shares soaring. Now that the mercurial CEO is doubling down on doing the polar opposite, investors are predictably spooked by the huge swings in priorities.

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

Ives argued that Musk's announcement of a new political party could place even more strain on his already troubled relationship with those who are propping up Tesla's astronomical $1 trillion valuation.

"While the core Musk supporters will back Musk at every turn no matter what, there is broader sense of exhaustion from many Tesla investors that Musk keeps heading down the political track," Ives wrote.

For his part, Trump wasn't impressed by Musk's declaration of war, calling his plans "ridiculous" in a Truth Social post, and arguing that the billionaire had gone "completely off the rails."

In short, it doesn't take much to see the precarious position Tesla finds itself in.

It remains to be seen whether Tesla investors will have finally had enough of his antics. Experts are already wary of the possibility that the company's stock is massively overvalued, with its share price serving as an indicator of Musk's popularity — rather than a healthy car business.

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