TLDR
- Tesla stock down 0.2% in premarket as Musk reportedly backs away from forming the “America Party”
- Tesla insiders (excluding Musk) sold over 50% of their shares in the past year, worth approximately $2 billion
- Tom Zhu reduced his stake by 82% in a single year despite Musk’s claims about Tesla’s future value
- Tesla launched Model Y “L” variant in China but US production uncertain due to self-driving focus
- Tesla stock down 18% year-to-date but up 49% over past 12 months
Tesla shares opened slightly lower Wednesday morning as reports emerged that CEO Elon Musk may be stepping back from his plans to create a third political party. The electric vehicle maker’s stock dropped 0.2% to $328.66 in premarket trading.
The Wall Street Journal reported Tuesday evening that Musk was “quietly pumping the brakes” on forming the America Party. Sources familiar with his plans indicated the billionaire CEO was backing away from the political venture he announced in July.
Tesla declined to comment on the reports. The company has faced challenges this year as political controversies affected its brand image and sales performance.
Musk’s involvement in the Trump administration initially alienated core Tesla buyers who lean politically left. Global vehicle sales dropped 13% year-over-year in the first half of 2025, with management citing brand image challenges as a factor.
The CEO’s departure from the administration led to public feuding with President Trump over government spending. This conflict added volatility to Tesla’s stock price throughout the year.
In July, Musk promised to form the America Party as an alternative to traditional Democrats and Republicans. The announcement came during the height of his disputes with the Trump administration.
Insider Trading Patterns Raise Questions
While political drama may be cooling down, another story has been unfolding behind the scenes. Tesla insiders have been selling shares at a rapid pace over the past year.
Excluding Musk himself, Tesla executives and board members have sold more than 50% of their holdings. This represents approximately $2 billion worth of stock at current prices.
The selling spree includes key executives like Tom Zhu, who oversees Tesla’s manufacturing operations. Zhu reduced his stake by 82% in a single year, despite Musk’s public claims about Tesla’s bright future.
Tesla’s executive ranks have thinned considerably. The company now lists only three key executives: Musk, Zhu, and CFO Vaibhav Taneja. Several others left the company in recent months, including Drew Baglino, the former head of engineering.
Board members also reduced their holdings through the year. Some changes resulted from stock option cancellations related to a shareholder lawsuit over executive compensation.
Product Updates and Future Focus
Tesla made product news this week with the launch of the Model Y “L” variant in China. The new configuration features six seats with a third row and captain’s chairs in the middle.
Musk indicated the variant might not come to the US market. He suggested that self-driving technology could make the need for additional seating configurations unnecessary in America.
The CEO continues to emphasize autonomous driving as Tesla’s primary value driver. Analyst Jed Dorsheimer from William Blair recently valued Tesla’s self-driving technology at nearly $1 trillion.
Tesla’s current vehicle lineup faces pressure from declining sales. More model variations could help address this challenge, but Musk remains focused on artificial intelligence applications.
The company’s stock performance reflects mixed investor sentiment. Shares are down 18% year-to-date but have gained 49% over the past 12 months.
