One day after President Trump signed into law the tax cut and spending bill that had provoked a split of the former power couple, the Tesla CEO said he was forming a third party to end the Republican and Democrat duopoly in Washington. It marks the return to political activism that many Tesla investors had hoped was firmly behind them following the entrepreneur’s tumultuous spell in the White House.

“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,” warned Wedbush Securities tech analyst Dan Ives. “There is a broader sense of exhaustion from many Tesla investors that Musk keeps heading down the political track.”

Shares in Tesla have had a roller coaster year in 2025, plunging on the back of his controversial government cuts before soaring once more when it became clear he would leave the Trump administration. On Monday, the stock was down nearly 7% lower in pre-market trading amid fears a sitting U.S. president with a majority in both chambers of Congress could view Musk “more as a foe than a friend now”, as Ives phrased it. 

Vows to return full time to deliver on top strategic priorities

In late May, when Musk’s time in the administration had all but wound down, the entrepreneur vowed to return full-time to running multiple billion-dollar companies. That was precisely the news Tesla investors wanted to hear: the company hasn’t delivered on its new low-cost model and still needs to scale up its autonomous ride hailing service across the country—the company’s two biggest strategic priorities this year.

The Tesla CEO had been so smitten by Trump’s MAGA agenda last year that he put a quarter billion dollars of his own wealth into Trump’s campaign, served as a top advisor in his administration and rarely budged from the president’s side. “This could be the greatest administration since the founding of the country,” he said in late April.

Almost as soon as left the White House, however, his alliance with Trump fractured over the latter’s Big, Beautiful Bill that raises the U.S. federal debt limit by $5 trillion. Now Musk plans to finance races in a dozen or so hotly contested House and Senate seats critical to maintaining a Republican majority in Congress.

“Given the razor-thin legislative margins, that would be enough to serve as the deciding vote on contentious laws, ensuring that they serve the true will of the people,” he reasoned.

‘There is a large graveyard filled with my enemies. I do not wish to add to it’

One of the foremost bulls on the stock, Ives has argued the chance of a further escalation in conflict were low given the two need each other. Yet he might have been better served by sticking with his initial prediction the feud between the world’s wealthiest man and arguably its most powerful one had only just begun.

Musk is known for playing to win, and has often said that while he doesn’t go out looking for a fight, he will finish them. “There is a large graveyard filled with my enemies. I do not wish to add to it, but will if given no choice,” the entrepreneur said in November 2023. “Those who pick fights with me do so at their own peril.”

Now Ives said it would not “shock” him if the the board gets involved at some point to exert pressure on their CEO.

Tesla did not respond to a request for comment by Fortune, but Treasury Secretary Scott Bessent did suggest the company’s directors ought to intervene.

Fake FEC filing highlights fears Tesla could be linked to Musk party

“I imagine that those boards of directors did not like this announcement yesterday, and will be encouraging him to focus on his business activities, not his political activities,” Bessent told CNN on Sunday.

Thus far, however, Tesla’s board has remained largely silent throughout Musk’s period of politically activity. Whether during the initial round of protests and boycotts or more recently during the feud with the president, neither Tesla chair Robyn Denholm nor any of her colleagues in charge of governance and oversight have intervened publicly—not even when the stock lost $150 billion in one day.

Now Musk risks dragging Tesla the political wilderness by alienating Capitol Hill lawmakers on both sides of the aisle. In a post symbolic of fears the company was now directly linked to his America Party, Musk was forced to correct the record that Tesla’s finance chief Vaibhav Taneja was not serving as Treasurer after a convincing fake had been uploaded to the Federal Election Commission’s website domain.

“This filing is false and has been reported as such to the FEC,” Musk said late on Sunday.