Elon Musk has quietly abandoned his brief attempt to carve out a new political movement in the US. According to the Wall Street Journal, he has shelved his plans for an “America Party”. However, it isn’t just Tesla’s struggle with falling sales, lawsuits, and deepening investor unease that has shaped its decision.
The billionaire, who unveiled the idea of a third force in American politics only last month amid a bitter public feud with Donald Trump, has now told associates he does not intend to pursue it. Instead, Musk is said to be focusing his attention back on Tesla, the company that made him the world’s richest man but which is now enduring one of its most difficult years in a decade.
‘A few tough quarters’
Tesla shares have fallen by 18% since January, hit by a sharp slowdown in deliveries and the company’s worst quarterly sales decline in over a decade. Demand has waned in Europe and the US, where Musk’s vocal embrace of Trump and far-right figures has alienated some customers. Meanwhile, Chinese rivals are racing ahead on battery and software technology, eroding Tesla’s dominance in the electric vehicle market it once defined.
Musk has already warned investors to brace for “a few tough quarters” as the Trump administration winds down subsidies for electric cars. At the same time, Tesla faces mounting legal scrutiny.
Earlier this month, a jury in Florida ordered the company to pay $243m in damages after ruling that its Autopilot driver-assistance system was partly responsible for a fatal crash.
Tesla, which is appealing, insists the accident was caused by human error. Yet the verdict has paved the way for dozens of similar claims, while a separate class action accusing the company of misleading buyers about the promise of self-driving cars has also been allowed to proceed.
Support for J.D. Vance
The cases have underscored the gulf between Musk’s futuristic rhetoric and Tesla’s current reality. Despite his repeated claims that full autonomy is imminent, Tesla vehicles stay put at Level 2 automation, meaning drivers must remain alert and ready to intervene at all times.
Apart from a small pilot fleet of robotaxis operating around Austin, the vision of cars driving themselves without human oversight remains underpromising. But the technology is key to funding.
Against this backdrop, Musk’s political manoeuvring has alarmed investors. His feud with Trump earlier this summer spiralled into one of the year’s most bitter exchanges. Ultimately, it culminated in his July 4 declaration (“Independence Day” to start an “independent party”) that the time had come for a new political wing. At the time, Musk pitched the America Party as a disruptive force that could swing a handful of seats in Congress and act as a check on the two-party system.
But the plan appears to have unravelled almost as quickly as it was announced. According to US media reports, Vice President J.D. Vance has urged Musk to abandon the project and “return to the fold” of the Republican Party.
The Tesla boss, who poured nearly $300m into supporting Trump and Republican candidates in 2024, is now said to be weighing financial support for Vance should he mount a White House bid in 2028. Lesson not learned then?
