Group 1 - Elon Musk announced the formation of a new political party, the "American Party," aiming to challenge the existing two-party system in the U.S. This decision was influenced by the recent signing of the "Big and Beautiful Act" by Trump, which eliminated a $7,500 tax credit for electric vehicles, potentially costing Tesla around $1.2 billion annually, or 17% of its expected profit for 2024 [1][2] - The political landscape in the U.S. is historically unfavorable for third parties, with the "winner-takes-all" electoral system making it extremely difficult for smaller parties to gain traction. The Democratic and Republican parties have established strongholds in populous states like California and Texas, making it challenging for third parties to compete effectively [2][3] - Following Musk's announcement, Tesla's stock price dropped nearly 7% in a single day, resulting in a market value loss of $68 billion. Year-to-date, Tesla's stock has declined over 20%, making it one of the worst-performing tech giants [2][3] Group 2 - Investors are concerned that Musk's political endeavors may distract him from Tesla's critical phases in autonomous driving and AI development. The new legislation reducing subsidies for clean energy and electric vehicles could negatively impact Tesla's sales and complicate its relationship with the government [3] - The uncertainty surrounding Musk's political activities poses a significant risk to Tesla's future, as political instability is a major concern for capital markets. If Musk continues to pursue the "American Party" initiative, Tesla's stock may face ongoing pressure [3]