Charles Esther
In a significant move, Lehigh County, a swing county in Pennsylvania, has decided to halt new investments in Tesla, citing CEO Elon Musk’s political activities and the company’s declining stock performance.
The decision came from the county’s pension board, which oversees assets totaling $500 million. It marks the first known U.S. pension fund to stop purchasing Tesla stock amid growing concerns over Musk’s leadership and the company’s financial health.
Political Activities and Declining Revenue
Mark Pinsley, Lehigh County’s controller and the driving force behind the motion, expressed concerns over Musk’s increasing involvement in politics, which he believes has negatively impacted the Tesla brand.
“Elon Musk’s choice to become a political figure rather than a customer-focused leader has compromised the Tesla brand,” said Pinsley. He pointed to the company’s troubling financial performance, including a 71% drop in earnings from the previous year and a 20% decrease in auto revenues.
“Tesla’s profitability has taken a sharp dive,” Pinsley added. “We owe it to our retirees and taxpayers to take a hard look at whether these are wise investments at this time.”
The Vote to Halt New Investments
On Tuesday, the Lehigh County pension board voted 4-2 to stop new Tesla stock purchases. Additionally, the board has directed the county’s investment manager to draft a report on options for divesting the county’s passively managed funds from Tesla.
The decision reflects a growing unease among pension funds about the risks associated with Musk’s political involvement and the financial instability at Tesla.
Growing Calls for Tesla Divestment
Lehigh County is not alone in its concerns. In March, a group of 51 New York State legislators called for the state to divest its $1 billion in Tesla holdings. Furthermore, a leading candidate in the New York City Comptroller race has pledged to pull the city’s $300 billion pension portfolio out of Tesla if elected.
Brad Lander, the current New York City Comptroller, has also been vocal about his dissatisfaction with Musk’s leadership but has not called for a divestment in his office’s latest response.
The city’s five public pension systems held over 3 million Tesla shares worth approximately $1.26 billion in December 2024. By March 2025, this value had decreased to $831 million, highlighting the financial consequences of Musk’s leadership.
In addition to these U.S. efforts, several global pension funds have already divested from Tesla. The Netherlands’ largest pension fund sold off its $600 million stake in January, and Denmark’s $20 billion pension fund, AkademikerPension, followed suit in March.
The Tesla Takedown Movement Gains Momentum
The growing concerns over Musk’s political involvement have given rise to the Tesla Takedown movement. This grassroots campaign aims to push for resolutions at local, state, and national levels to divest from Tesla and other companies associated with Musk.
The movement, which initially began as mass protests, is now evolving into a more structured effort. Its goal is to help cities and states develop policies to divest from “all things Musk,” especially in light of Tesla’s declining performance and Musk’s political distractions.
Tesla’s Financial Struggles
Tesla’s financial troubles are becoming harder to ignore. As of May 6, Tesla’s stock has dropped more than 27% since the beginning of 2025. The company’s Q1 revenue also missed expectations, prompting concerns about its future prospects.
During Tesla’s latest earnings call, Musk announced that he would be stepping back from his political activities at the White House, possibly in response to growing shareholder pressure.
The Impact of Musk’s Leadership on Tesla’s Brand
Marketing experts have highlighted that Tesla’s focus on Musk’s political pursuits may have alienated the company’s core customer base. This shift in focus could require a significant rebranding effort to regain public trust.
David J. Reibstein, a marketing professor at the Wharton School, commented, “To some degree, Musk can say, ‘I don’t care because I’m so rich and I’ve got so many other entities that I could afford to lose a lot of money.’ But for the other shareholders who are bailing on the company, that’s problematic.”
Conclusion: The Future of Tesla and Musk’s Influence
As Tesla faces increasing pressure from pension funds, lawmakers, and global investors, the company’s future remains uncertain. Musk’s political activities continue to be a point of contention, and his leadership is under growing scrutiny.
For now, pension funds like Lehigh County’s are taking a cautious approach, halting new investments in Tesla and seeking alternatives. The Tesla Takedown movement and divestment campaigns show no signs of slowing down, and the company’s ability to regain stability will depend heavily on how Musk responds to these mounting challenges.
