Calls for pensions to divest from Tesla are increasing as the stock declines and CEO Elon Musk becomes more involved in global politics. So far, the $20 billion Danish pension fund, AkademikerPension, has announced plans to sell off its small stake in Tesla and blacklisting the company.
Jens Munch Holst, CEO of the pension, said that Musk “stepping into American and European politics” and “spreading misinformation” was creating “considerable risks to returns,” making it “hard to stay invested” in Tesla.
Tesla’s stock has fallen nearly 41 percent year-to-date as of March 18, losing more than half its value since its peak closing price of nearly $480 on December 17.
In the U.S., lawmakers and pension participants are pushing for divestment from Tesla, citing Musk’s actions and the company’s declining stock. In New York, state senators are urging the state comptroller to sell the $273 billion New York State Common Retirement Fund’s $1.4 billion holdings in Tesla. Senator Patricia Fahy (D. Albany) cited “Tesla’s ongoing volatility and significant profit decline” as the reason to divest. While New York state comptroller Thomas DiNapoli‘s office acknowledged the senators’ concerns, his office has made no commitment to reallocate.
Similarly, retirees in California want the state’s largest public pensions to halt investments in Tesla. Participants in the state’s $503 billion Public Employees’ Retirement System have called on the board to divest, citing concerns over management, overvaluation, and ethics.
Meanwhile, retirees with the $353 billion State Teachers’ Retirement System are also pushing for divestment, with the board receiving 38 such requests ahead of its March 12 meeting. As of June, CalPERS held 9.2 million Tesla shares worth over $2 billion; CalSTRS owned 4.6 million shares valued at nearly $1 billion.
Divestment Seen as Largely Symbolic
While allocators with whom Institutional Investor spoke understand the sentiment behind the pushback, they see divestment as largely symbolic, with minimal impact on the company or broader market dynamics. Unless there’s a concerted global effort to boycott a company, such actions are unlikely to be effective.
Not just possibly ineffective, but also more complex than advocates may realize. One CIO noted that individual stocks typically represent small portions of an institution’s overall portfolio — which are often not consolidated in a separately managed account but spread across multiple ETFs managed by different firms.
Allocators also noted that, rather than imposing a real cost of capital, divestment often cedes control to other investors and suggested that influencing corporate direction requires not withdrawal, but active engagement.
Some also raised concerns about potential shareholder lawsuits against Musk, citing his personal actions, reduced focus on Tesla, and misalignment with the company’s core markets. Overall, they agreed that divestment is unlikely to drive meaningful change and may even backfire.
EV Market Poised for Growth
Tesla faces declining sales, growing global protests, and boycotts, pressuring its market performance. Analysts have lowered their price targets for the car manufacturer’s stock, citing weakening demand, growing competition from Chinese EV makers, and uncertainty over tariffs.
Despite Tesla’s struggles, the EV market is poised for robust growth. Data from research firm Rho Motion show that over 17 million EVs were sold globally in 2024, up 25 percent from the year prior.
By 2030, the International Energy Agency projects that nearly one-third of cars on Chinese roads and one-fifth in the U.S. and EU could be EVs. Policy incentives, falling battery costs, and expanding supply chains could have EVs comprise half of global car sales by 2035.
