A Pennsylvania Pension Fund Halted New Tesla Investments

A swing county in Pennsylvania has determined that it’s going to now not buy new Tesla inventory, citing CEO Elon Musk’s political actions and the corporate’s declining shares.

Lehigh County, positioned towards the east of Pennsylvania with a comparatively prosperous inhabitants that’s typically a swing county, has a county pension board that oversees $500 million in property. It’s the first identified US pension fund to cease buying new Tesla inventory.

“Elon Musk’s option to turn out to be a political determine somewhat than a customer-focused chief has compromised the Tesla model,” Mark Pinsley, the Lehigh County controller who first launched a movement to stop Tesla investments, stated in a joint assertion with organizers of Tesla Takedown.

“Tesla’s earnings are down 71% from a yr in the past, their auto revenues have dropped 20%, and profitability has taken a pointy dive,” Pinsley added. “We owe it to our retirees and taxpayers to take a tough take a look at whether or not these are clever investments presently.”

On Tuesday, the board not solely voted to hit the brakes on new Tesla investments in a 4-2 resolution, it has additionally and directed the county’s funding supervisor to draft a report outlining choices to divest its passively managed funds from Tesla.

The Lehigh County Controller’s Workplace and Tesla didn’t instantly reply to requests for feedback.

Pinsley and the retirement board of Lehigh County aren’t the one ones involved about pensions invested in Tesla.

In March, a bunch of 51 New York State legislators known as on the state to divest its $1 billion in Tesla holdings. A high contender within the New York Metropolis Comptroller race has pledged to tug town’s $300 billion pension portfolio out of Tesla if elected.

Brad Lander, the present New York Metropolis Comptroller, has additionally been vocal about his dissatisfaction with Musk’s management, however stopped wanting calling for a divestment in his workplace’s newest response to BI in April. Town’s 5 public pension techniques held greater than 3 million Tesla shares value about $1.26 billion on December 31, 2024, but this determine has shrunk to $831 million by March 28, in response to the comptroller’s workplace.

In April, eight state treasurers penned a joint letter to Tesla’s board to precise concern over Musk’s lack of concentrate on Tesla, and the American Federation of Academics is urgent main asset managers — together with BlackRock and Vanguard — to contemplate divestment.

Past the US border, the Netherlands’ largest pension fund offloaded its $600 million stake in Tesla in January. Denmark’s $20 billion pension fund, AkademikerPension, adopted swimsuit in March. Lately, Canada’s largest public-sector union additionally urged nationwide pension funds to chop ties with Tesla, although divestments have but to occur.

Tesla has been going through rising stress over Musk’s governance of the corporate and his political exercise.

The Tesla Takedown motion that emerged in protest of Musk’s involvement within the White Home DOGE workplace is aiming to evolve past demonstrations. The motion’s subsequent objective is to serving to cities and states develop resolutions to divest in “all issues Musk,” in response to a press release on April 22 after Tesla reported earnings.

As of Could 6, Tesla inventory has declined greater than 27% for the reason that starting of 2025, and its Q1 income missed expectations. Musk has introduced through the newest earnings name that he will likely be stepping again from his political actions on the White Home.

Advertising specialists have beforehand informed BI that Tesla has alienated its core buyer base, and that rebranding efforts might require vital concessions from Musk.

“To a point Musk can say, ‘I do not care as a result of I am so wealthy and I’ve obtained so many different entities that I may afford to lose some huge cash.'” David J. Reibstein, professor of selling on the Wharton Faculty, beforehand informed BI. “However for the opposite shareholders who’re bailing on the corporate, that is problematic.”