Shares in Tesla tanked by as much as 7.6% in premarket trading Monday after its CEO Elon Musk said he is forming a new American political party, provoking an irate response from US President Donald Trump.

President Donald Trump on Sunday called Elon Musk's plans to form a new political party "ridiculous," launching new barbs at the tech billionaire and saying the Musk ally he once named to lead NASA would have presented a conflict of interest given Musk's business interests in space.

President Donald Trump blasted Elon Musk’s bid to start a new political party, as the intensifying feud between the former allies deepens concerns among investors over the implications for Tesla Inc.

Dan Ives, an analyst with Wedbush Securities, wrote that Musk's continued push into politics was "exactly the opposite direction" investors wanted to see.

President Donald Trump dismissed Elon Musk’s plan to launch a new political party, calling it “ridiculous” and insisting the U.S. remains a “two-party system.” “Third parties have never worked, so he can have fun with it,