Swedish pension fund blacklists Tesla as institutions continue to get wary

Swedish pension fund AP7 has blacklisted Tesla and sold all its shares citing labour rights valuations by the US electric vehicle (EV) giant in the US. The fund joins an increasing number of institutions that are shunning Tesla in recent months.

“AP7 has decided to blacklist Tesla due to verified violations of labor rights in the United States. Despite several years of dialogue with Tesla, including shareholder proposals in collaboration with other investors, the company has not taken sufficient measures to address the issues,” said the fund in its release.

Swedish pension fund blacklists Tesla

The fund held a $1.36 billion stake in Tesla at the end of May, which was around 1% of its AP7 Equity Fund. Notably, the fund has long been taking up the issues of labour rights at Tesla, and along with Nia Impact Capital, it filed a shareholder resolution at Tesla’s 2022 AGM to strengthen workers’ rights.

“AP7 has been in dialogue with Tesla for several years regarding concerns over workers’ rights. Given limited progress in those discussions, AP7 has chosen to actively support this shareholder resolution which aims at strengthening employee rights and improving transparency on disputes such as discrimination and harassment,” said Charlotta Dawidowski Sydstrand, Head of ESG at AP7, on the resolution.

Many institutions are wary of investing in Tesla

Several funds and institutional investors have either stopped investing in Tesla or have significantly reduced their holdings for reasons mostly due to Musk’s public behavior and political involvement. The company’s financial performance, intense competition in the electric vehicle market, and issues related to union rights have been among the other reasons why some institutions have shunned Tesla shares.

In March, Danish pension company Akademikir Pension announced it would sell its stake in Tesla amid concerns about the company’s labour rights, lax corporate governance, and Musk’s behaviour.

Later in April, Swedish insurer Folksam also divested its $160 million stake in Tesla. “Unfortunately, no improvement has been seen and a decision has therefore been made to divest the holding,” said Marcus Blomberg, Folksam’s head of asset management and sustainability

Last month, Pennsylvania’s Lehigh County Pension Board voted 4-2 to halt fresh purchases of Tesla shares, becoming the first known case of a public pension fund blocking investments in Elon Musk run company. The fund blamed Tesla’s performance and Musk’s political activities for its decision. Lehigh County Controller Mark Pinsley said, “With Tesla’s earnings down 71% year-over-year and auto revenues falling 20%, our $500 million pension board prioritizes fiduciary responsibility.”

Musk’s political activities are making some institutions wary

Pinsley also blamed Musk’s political activities for the decision and said, “I introduced this motion out of concern for CEO Elon Musk’s political public profile and its adverse impact on Tesla’s brand and Tesla’s market performance.”

He emphasized, “I believe this decision protects our retirees and may serve as a precedent for other institutional investors.”

Tesla is facing a backlash for Musk’s political activities

Tesla is facing a lot of backlash in Europe over Musk’s support for far-right candidates. Several buyers have boycotted Tesla vehicles in Europe, which is reflected in the company’s sales.

In April, BYD sold more BEVs than Tesla in Europe. While the Elon Musk-run company has been in Europe for quite some time now and also has one of its Gigafactories in Berlin, BYD entered the region only in late 2022. Moreover, BYD cars face tariffs in the EU, while the cars built by Tesla at its Germany Gigafactory are exempt from these tariffs.

While there were some bright spots in Europe last month as sales rose in some markets, particularly Norway, they were more than offset by the over 50% yearly decline in countries like France, Sweden, and Portugal.

In a related move, 10 drivers in Paris filed a lawsuit against Tesla, alleging that the perception about its cars becoming political symbols “prevents them from fully enjoying their car.”

Patrick Klugman, one of the lawyers working on the case, told Agence France-Presse, “The situation is both unexpected and impossible for French Tesla owners.” He added, “we believe that Mr Musk owes these buyers the peaceful possession of the thing sold.”

To be sure, even Musk admitted on more than one occasion that his political activities have hurt his businesses. During the Q1 2025 earnings call in April, Musk began his commentary by talking about his stint with President Donald Trump’s Department of Government Efficiency (DOGE) and the “blowback” for that association.

Musk backs down in his feud with Trump

Musk has since left DOGE, and relations between him and Trump have since deteriorated after the Tesla CEO criticized Trump’s “Big Beautiful Bill.”

Meanwhile, after a bitter breakup with President Trump, Musk has expressed “regret” about some of his posts targeting Trump without specifying which ones. While the feud started with Musk criticizing Trump’s tax and spending bill, it soon got ugly. The Tesla CEO claimed that President Trump’s name is mentioned in the Jeffrey Epstein files and boasted that if not for him, Trump wouldn’t have won in the 2024 elections.

Trump responded sharply, accusing Musk of going “crazy” and threatening to terminate government contracts and subsidies for Musk’s companies like SpaceX and Tesla. It’s quite rare for Musk to apologize for his tweets. However, markets see it as a sign that the bitterness between Musk and Trump has somewhat eased, even though most agree that the relationship between the two might never be the same again.