The empire of Elon Musk, the world's richest man, is far from collapsing but is becoming increasingly vulnerable amid an escalating conflict with U.S. President Donald Trump, Axios reports.

Why it matters:

Previously, Musk's alliance with Trump brought Tesla and SpaceX political bonuses and a rise in the billionaire's fortune. However, the split came after Musk criticized new Republican spending. In response, Tesla's stock has continued to fall, with investors questioning the future of government support.

What Happened:

Tesla lost value again on Monday, with the stock falling 6.8% after Musk announced the creation of a new political force called the America Party and said he intends to influence congressional elections in 2026.

Musk has lost nearly $20 billion on paper since breaking with Trump, and investors' cumulative losses have exceeded $100 billion. Tesla shares have fallen 14% since the beginning of June.

What it means for business:

Conflict with Trump jeopardizes Republican loyalty and possible government contracts for SpaceX.

Tesla is losing market amid political scandal and growing competition from Chinese giant BYD. Tesla's deliveries fell nearly 14% in the second quarter.

In June, the company began launching a robotaxi in Austin, a project critical to Tesla's future.

“We see huge potential, but the risks are now very significant,” said Spear Invest analyst Ivana Delewska, who recently sold Tesla shares due to “political complications.” Analysts say investors are tired of Musk's “political distractions” at a time when the business demands his full attention. “We'd rather he focus on robotaxis,” William Blair analyst Jed Dorsheimer wrote in a research note.

What's next:

Despite everything, Musk's fortune is still estimated at $361 billion - that's $100 billion more than Mark Zuckerberg's. But amid rumors of a search for a replacement for Tesla's CEO (which Musk and CEO Robin Denholm deny), questions are growing about whether the tech company will be able to stay the course without more political scandals.