Elon Musk, Tesla Chief Executive Officer (CEO), announced the formation of a new party. This comes amid differences regarding the 'One Big Beautiful Bill Act (OBBBA),' which U.S. President Donald Trump has been vigorously promoting. Investors in Tesla, who previously experienced a sharp decline in stock prices during the conflict between Musk and Trump, are growing increasingly concerned.
According to the financial investment industry on the 6th, Musk wrote on social media platform X, "I am founding the 'America Party' to return freedom to you." He added, "(The Republican and Democratic parties) are bankrupting America through waste and corruption" and claimed, "We are living under a 'one-party system', not a democracy."
Musk rose to prominence as a close aide to Trump while actively supporting him during last year's presidential election campaign. He even served as the first head of the Department of Government Efficiency (DOGE) in the Trump administration.
However, tensions grew between Musk and Trump over the OBBBA, which is centered on large-scale tax cuts. Issues arose, including the elimination of the tax credit for electric vehicle purchases (up to $7,500).
Tesla shareholders are on edge. This is because Tesla's stock price had sharply declined previously when Musk criticized Trump. The stock price, which reached $367.71 in May, fell to $273.21 in June after Musk posted a series of critical comments about Trump on X.
On the 11th, Musk said, "I regret some of the posts I made about President Trump. They were too much," and only after Trump agreed to reconcile did the Tesla stock reclaim the $300 mark. However, after Musk turned against Trump again within 17 days, Tesla's stock has started to give back some of its gains this month.
Individual investors in the United States, known as 'seohak gaemi', are worried that Musk's founding of a new party may once again lead to a decline in stock prices. Since Tesla is the most preferred stock among these investors, a mere 1% drop in stock price would result in a decrease of hundreds of billions of won in the balance of domestic investors.
According to the Korea Securities Depository, as of the 3rd, the amount held in Tesla shares exceeded $21 billion (approximately 28.61 trillion won). This is the highest among foreign stocks. It is more than $7.4 billion (about 10 trillion won) greater than NVIDIA, the second-largest holder at $13.6 billion. The investment scale of the exchange-traded fund (ETF) 'TSLL', which tracks the daily price movements of Tesla, also exceeds $2.8 billion (about 3.8 trillion won).
Market outlooks for Tesla's stock price are mixed. Concerns exist over how discord with Trump could impact the company, alongside the anticipation for the robo-taxi (autonomous unmanned taxi) service. According to MarketScreener, an investment analytics platform, the average target stock price for Tesla among 47 institutions is $304.97, with a wide gap between the lowest at $115 and the highest at $500.
Global investment bank Wedbush has set the highest target price for Tesla, while identifying Musk's movements as a variable. Wedbush noted, "The conflict between Musk and Trump is causing new uncertainties and fatigue among investors," adding, "Given that the key elements for the success of the robo-taxi and Cybertruck are regulations related to autonomous vehicles, there are concerns that the Trump administration may take a more conservative stance on government expenditure related to Tesla."