AFT Urges Review of Tesla Holdings Amid Falling Stock and Sales Concerns

Concerns Rise Over Pension Fund Investments Amid Tesla’s Stock Decline

NEW YORK—Randi Weingarten, President of the American Federation of Teachers (AFT), has issued a call to action for more than 75 state and city chief fiduciary officers overseeing major U.S. public pension funds. She is urging them to reassess their investments in Tesla, the beleaguered electric-vehicle manufacturer, due to a significant portion of these pension funds being tied up in the company's stock.

Tesla's recent first-quarter report highlights a sharp downturn in the demand for its vehicles in the United States, mirroring similar disappointing results from Europe. This downturn has been accompanied by a steep decline in Tesla's share price, which has fallen approximately 30 percent this year and stands 40 percent below its peak in December 2024. Consequently, the company’s market value has plummeted from $1.5 trillion to about $800 billion over the past three months.

The AFT’s letter calls on fiduciaries, including those managing substantial funds like the California State Teachers’ Retirement System and the Teachers’ Retirement System of the City of New York, to demand transparency from Tesla regarding billions in corporate loans secured against CEO Elon Musk’s 13 percent stake in the company. At the end of 2024, Musk had pledged over 230 million Tesla shares as collateral for unspecified loans, with no clarity on the margin call price that could trigger a financial crisis.

Weingarten had previously reached out in February to top U.S.-based asset managers such as BlackRock, Vanguard, State Street, T. Rowe Price, Fidelity, and TIAA, expressing concerns about the risk to retirement security posed by the extensive Tesla holdings in AFT members' portfolios, which are part of pension funds amounting to an estimated $4 trillion. However, there has been no response from these asset managers so far.

"Today’s precipitous drop in Tesla sales increases the retirement risk to plans that millions of nurses, teachers, and other workers are invested in," stated Weingarten. "Our members’ right to retire with dignity and grace after decades of service to families and communities is paramount. It’s why we were bitterly disappointed in the initial lack of response from asset managers, and why today we are urgently asking chief fiduciaries to demand additional and immediate clarity.”

The full letter can be read here.

The AFT represents 1.8 million pre-K through 12th-grade teachers, paraprofessionals and other school-related personnel, higher education faculty and professional staff, federal, state, and local government employees, nurses and healthcare workers, and early childhood educators.

---
Read More USA Works News