• Tesla shares decline nearly 7% following Elon Musk's announcement of the "America Party."
• The announcement has led to concerns about Musk's political distractions harming Tesla's business.
• Analysts indicate a growing sense of exhaustion among investors regarding Musk's political involvement.

Tesla shares fell approximately 7% on Monday after CEO Elon Musk's announcement of launching a new political party named the "America Party," which has reignited concerns about his focus on the electric vehicle manufacturer. This decline is significant, with Tesla losing over $68 billion in market capitalization in a single day, causing alarm among investors about Musk's commitment to managing the company amidst his political ambitions, according to Indiatimes and Bangkok Post.

The announcement coincides with an increasing public feud between Musk and former President Donald Trump, who criticized the party as "ridiculous" and suggested potential repercussions for Musk's companies related to government contracts. Trump's comments have raised alarms among investors, particularly because Tesla relies on substantial government subsidies, with analysts warning that Musk's political engagement could jeopardize these vital financial resources, according to Los Angeles Times and The Hill.

Investor confidence has been dwindling as Musk's previous commitments to focusing on Tesla were overshadowed by his return to politics and prior involvement with the Department of Government Efficiency (DOGE). "Investors had been hopeful Musk would remain focused on Tesla without the political noise, but his latest move is causing a broader sense of exhaustion," noted Dan Ives, a Wedbush Securities analyst, highlighting the sentiment shared by many investors wary of recurring distractions from his political engagements, according to Indiatimes and Business Insider.

As a result of Musk's announcement, investment firms like Azoria Partners are reconsidering their strategies; the CEO announced postponement of a planned Tesla exchange-traded fund due to concerns about Musk's political role undermining confidence in the company. Investor and Tesla critic Ross Gerber echoed this sentiment, remarking, "You're supposed to be selling cars and robotaxis, and instead we're fighting with the President of the United States," indicating a clear discontent among Tesla stakeholders regarding Musk's distraction with politics, according to Newsweek and Al Jazeera.