Tesla shares slumped 6.8% on Monday, closing at $293.94 after Chief Executive Officer Elon Musk’s weekend announcement that he is forming a third political force, the “America Party.” The slide – which at one point reached 8.4% in intraday trading – erased about $70 billion in market value and extended the stock’s 2025 fall to roughly 40%. The shares recovered about 1.5% in early pre-market dealings on Tuesday. Investors and analysts said the sell-off reflects mounting concern that Musk’s expanding political ambitions will further distract him from a company already under pressure. Tesla delivered 384,122 vehicles in the second quarter, down 13.5% from a year earlier, and faces intensifying competition from Chinese manufacturers. Wedbush’s Dan Ives called shareholder fatigue “palpable,” while Morgan Stanley’s Adam Jonas warned that Musk’s political activities could keep the shares under strain. Some large holders are pressing for action. Azoria Partners shelved the launch of an ETF tied to Tesla, and its chief executive urged the board to clarify whether Musk can meet full-time obligations as CEO. Other investors have asked directors to set limits on outside commitments before negotiating a new compensation plan for the billionaire. Musk’s party launch also reignited a public feud with President Donald Trump, who dismissed the move as “ridiculous” and said third parties sow “disruption and chaos.” The spat has amplified worries that the administration could tighten rules or pare back subsidies that benefit electric-vehicle makers, compounding market jitters around Tesla.