(MENAFN) Shares of Tesla, the American electric vehicle (EV) manufacturer, took a significant hit on Monday following CEO Elon Musk’s announcement that he plans to establish a new political party.

By 1500 GMT, Tesla’s stock had fallen roughly 7.3 percent, trading at USD292.22.

This decline contributed to a reduction in the company’s market value, which dropped to USD921.7 billion.

Over the past month, Tesla’s stock price has slid about 20 percent, largely driven by tensions between Musk and President Trump, sparked by the passage of the "Big Beautiful bill."

In a recent update, Musk revealed on Saturday that his new political party would be named the “America Party.”

He indicated that the party’s focus might be limited, targeting “just 2 or 3 Senate seats and 8 to 10 House districts,” following the bill’s approval by Congress.

Trump responded on Sunday, criticizing Musk’s political move as "ridiculous."

This came after Musk intensified his opposition to Trump’s "Big, beautiful bill" last week, vowing to create a new political party should the controversial omnibus legislation pass.

In retaliation, Trump claimed Musk would “head back home to South Africa” if federal incentives for electric vehicles were removed, further escalating the public dispute.

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