The world’s richest man Elon Musk shocked the political scene by announcing the formation of America Party following a dramatic split with President Trump. The former head of government agency DOGE and Trump’s main sponsor parted ways over a massive tax reform he called “insane.”
Why Elon Musk Is Creating America Party
America Party is an independent political party founded by Elon Musk in July 2025 as an alternative to the Republican-Democratic system. Tesla CEO announced the formation of America Party after an X poll showed 65% support.
Musk as former head of DOGE (agency for spending cuts) criticizes Trump’s reform for increasing the debt ceiling by $5 trillion and growing the deficit to $2.5 trillion annually. America Party is an independent formation focused on fiscal responsibility against government waste.
Key motivations of America Party:
- Fiscal responsibility: Fight against “insane waste” and deficit increases
- Political independence: Independent voting and negotiations with both parties
- Strategic focus: Targeting only 2-3 Senate seats for decisive vote in tight margins
Investment Impact: Which Sectors Will America Party Affect
Musk’s political activity is already dramatically affecting markets. Tesla lost more than 50% of its value from December highs, tech stocks are reacting nervously to growing uncertainty. Investors worry that political focus will divert Musk’s attention from core business.
Riskiest sectors for investors:
- Electric vehicles: End of EV tax credits may impact Tesla and competitors
- Space industry: SpaceX contracts under question will affect suppliers like Lockheed Martin
- Tech giants: Political instability pushes down tech sector valuations
- Green technology: Ending renewable energy subsidies may influence investment flows
Trump Threatens Musk: Response to America Party and Market Impact
President Trump reacted sharply, calling Musk a “derailed train.” Investment firm Azoria postponed Tesla ETF due to conflict of interest. Tesla shares lost more than half their value from December peaks. Trump threatened to withdraw billions in subsidies for Tesla and SpaceX.
Most heated moments of conflict:
- Personal attacks: Trump accused Musk of creating “complete chaos and disruption”
- Business threats: President threatened withdrawal of federal contracts worth billions
- Political strategy: Musk plans to actively support candidates against Republican lawmakers
- Investor pressure: James Fishback called for immediate Tesla board meeting
Future of America Party
Survey revealed 40% support for Musk’s political force, 14% of voters would “very likely” support it. Musk invested $280 million in Trump’s campaign, now his political movement represents challenge to Republican-Democratic system.
Although third parties historically failed for 160 years, Musk’s wealth and media influence create new situation. Political results will be watched by analysts as they affect market sectors and create changes in the investment environment.
