The Musk effect still underpins Tesla’s market cap. The shareholders who have pumped up its stock price are fixated on the technology future that he has conjured up, not the electric car business that is the company’s bread and butter today.

Investors are clearly worried Tesla CEO Elon Musk's promise to build a third US political party could do even more damage. The EV maker has been put through the wringer, from cratering sales worldwide to an enormous drop in year-over-year revenues.

Mr. Musk’s involvement in politics and his financial support for the president’s campaign were once seen by investors as a benefit to Tesla, fueling a steep rise in company shares after the election last year. That association has now turned into a liability. Tesla shares are down 40 percent from their peak in December.

Billionaire’s political threats have not stopped the president’s ‘big, beautiful bill’ hurting the electric-car maker’s profits