The Lehigh County, Pennsylvania pension board has become the first known U.S. public pension fund to cease new investments in Tesla, voting 4-2 to halt stock purchases amid growing concerns about the company's financial trajectory and leadership.
The pension board, which manages $500 million in assets, made the decision following Tesla's significant financial challenges, including a 71% drop in earnings and a 20% decrease in automotive revenue. The board has also instructed its investment manager to explore options for divesting existing passive holdings in the electric vehicle manufacturer.
This decision reflects broader national and international pressures on Tesla, with similar divestment calls emerging from New York legislators, labor unions, and pension funds in European countries like the Netherlands and Denmark. The move signals potential institutional investor skepticism about Tesla's current financial health and corporate governance.
Tesla's stock, trading at $354.11, has experienced recent volatility, reflecting the mounting challenges facing the company. The pension fund's action could potentially encourage other institutional investors to re-evaluate their Tesla investments, potentially increasing financial pressure on the electric vehicle manufacturer.
