Lehigh County's pension board has taken a significant step by voting to cease new investments in Tesla, marking a potential turning point for the electric vehicle manufacturer's institutional investor relationships. The board, which manages $500 million in assets, voted 4-2 to halt Tesla stock purchases, driven by concerns over the company's financial performance and CEO Elon Musk's political engagement.
The decision comes after Tesla experienced a dramatic 71% earnings decline and a 20% reduction in automotive revenue. This financial downturn has prompted the pension board to not only stop new investments but also explore options for divesting existing passive holdings in the company.
The move reflects a growing trend of institutional investors reassessing their Tesla investments. Similar divestment calls have emerged from New York legislators, labor unions, and international pension funds in the Netherlands and Denmark, suggesting a potentially broader institutional skepticism toward Tesla.
Tesla's stock, currently trading at $354.11, has been under significant pressure from these financial and political challenges. The Lehigh County pension board's decision could signal a shift in institutional investor confidence and potentially influence future investment strategies in the electric vehicle sector.
