Elon Musk, the billionaire CEO of Tesla and SpaceX, escalated his feud with former President Donald Trump by announcing the formation of a new political party—the “America Party”—on Saturday. The move came just a day after Trump signed a sweeping tax-cut bill into law, which Musk warned would “bankrupt the country.”
Musk, once a major financial backer of Trump’s re-election campaign, declared the creation of the new party in a post on his social media platform X, writing: “Today, the America Party is formed to give you back your freedom.” He cited a poll showing that his followers supported the idea of a new political movement by a two-to-one margin.
The rift between the two high-profile figures deepened after Trump signed his so-called “big, beautiful” tax and spending bill on Friday, which Musk vehemently opposed. Having spent hundreds of millions supporting Trump’s campaign and leading a government efficiency initiative during Trump’s second term, Musk now claims the new tax policies will balloon the federal deficit from $2 trillion to $2.5 trillion—a move he called “insane” and economically disastrous.
The announcement immediately sparked backlash from investors. Azoria Partners, an investment firm, postponed the launch of a Tesla-focused exchange-traded fund, with CEO James Fishback demanding clarity from Tesla’s board on Musk’s political ambitions. Fishback argued that Musk’s new party undermines shareholder confidence, especially after Musk stepped down from his government role in May with expectations he would refocus on Tesla.
Trump had previously threatened to cut federal subsidies to Musk’s companies, including SpaceX and Tesla, if the billionaire continued his opposition. Republicans are reportedly worried that the public feud could weaken the party’s chances in the 2026 midterms.
Tesla’s stock, which surged after Trump’s re-election, has since faced volatility, dropping from a December high of over $488 to $315.35 last week amid the ongoing tensions.
Despite Musk’s vast resources, political analysts doubt the “America Party” can disrupt the long-standing Republican-Democratic duopoly, which has dominated U.S. politics since the 19th century. Trump, meanwhile, maintains a steady approval rating above 40% in his second term, despite his polarizing policies.
Neither Trump nor the White House has publicly responded to Musk’s announcement. The clash between the world’s richest man and one of its most powerful politicians shows no signs of cooling—raising questions about its impact on both Wall Street and Washington.