Elon Musk has announced the formation of a new political party, the America Party, in a major step away from his previous support for President Donald Trump. The announcement came on July 5, 2025, following weeks of rising tension over a controversial tax-and-spending bill passed by the Trump administration.
The bill introduces sweeping tax cuts and expands defense spending, drawing criticism from economists and business leaders. Musk, who once served as head of the Department of Government Efficiency during Trump’s first term, voiced concerns that the legislation could seriously increase the federal budget deficit. The elimination of green energy tax credits also fueled his opposition, as these incentives had supported Tesla’s growth.
Musk shared news of his new political group on his social platform X, citing strong public support for a third-party alternative. A user poll posted by Musk indicated that many Americans are dissatisfied with the current two-party system. His announcement has sent shockwaves through both the financial world and political circles.
Trump responded quickly during a press conference on July 6. He called Musk’s move “ridiculous” and warned that it could divide conservative voters. Though the White House has not released a formal response, Trump’s top economic adviser defended the administration’s policies on national television. He claimed that the tax bill would boost economic growth and dismissed Musk’s political ambitions as overblown.
Treasury Secretary Scott Bessent also weighed in, urging Musk to stay focused on leading Tesla and SpaceX. He suggested that the boards of both companies would likely have concerns about Musk diverting attention toward politics.
Financial markets reacted almost immediately. Tesla’s stock fell nearly seven percent following the news, continuing a broader decline of over 30 percent since late 2024. Azoria Partners, a major investment firm, postponed the launch of a new ETF tied to Tesla, citing rising political risk. The firm’s CEO publicly questioned whether Musk could continue managing Tesla effectively while pursuing a political career.
In a series of public posts, Azoria’s leadership urged Tesla’s board to meet and evaluate whether Musk’s political efforts align with his responsibilities as CEO. Investor anxiety has grown over the possibility that Musk may not be fully committed to his corporate leadership roles.
The America Party is structured to challenge both Republican and Democratic norms. Based on documents Musk shared on X, the party’s core goals include reducing the national deficit, increasing AI-driven defense systems, deregulating tech and science sectors, supporting families and manufacturers through tax breaks, and funding primary challengers to Republicans who backed the tax bill.
For now, the America Party does not plan to run a presidential candidate. Instead, Musk aims to win a small number of congressional seats in the 2026 midterm elections. His goal is to pressure the Republican majority into adopting new legislative priorities focused on fiscal discipline and innovation.
In explaining his break from the GOP, Musk called the Trump-backed tax plan “insanely expensive.” He warned that the bill would “destroy the American balance sheet” and said that it left him no choice but to form a new movement. Through the America Party, Musk hopes to promote what he describes as “pragmatic conservatism,” based on smart budgeting and tech-driven growth.
Musk is also reportedly considering the creation of political action committees (PACs) to back candidates who support these goals. However, no official filings have been made with federal election authorities as of yet.
As Musk steps into an open political role, the full impact of the America Party remains to be seen. But his entrance has already added a new layer of unpredictability to the American political landscape.
