The recent decision by Danish pension fund AkademikerPension to blacklist Tesla from its investment portfolio has sparked significant attention and debate. This move reflects deep concerns about Tesla’s current governance structure, brand risks, and political associations. To understand this decision, it’s essential to examine the background, reasons, and potential implications of this event.
Tesla has been facing significant challenges since late 2024, with declining global sales and a plummeting stock price. In January 2025, Tesla’s European sales dropped by 45% year-on-year, and its deliveries in Germany fell by a staggering 70.6% in the first two months of the year. Simultaneously, Tesla’s stock price has halved from its December 2024 peak, wiping out over $550 billion in market value. This downturn is closely tied to CEO Elon Musk’s political controversies, governance issues, and increasing competition in the electric vehicle market.
AkademikerPension, which manages over $20 billion in assets, emphasizes responsible investing, focusing on environmental, social, and governance (ESG) criteria. The decision to blacklist Tesla is a response to the company’s long-standing ESG risks, particularly its governance flaws and political entanglements.
One of the core reasons for the blacklisting is Tesla’s governance deficiencies. The company’s board lacks independence, with many members being close friends or long-term associates of Musk. For example, Musk’s $56 billion compensation package in 2018 was invalidated by a court due to the board’s lack of independence. Additionally, Tesla has faced criticism for its resistance to unions and alleged neglect of labor rights, which conflicts with Europe’s strong emphasis on worker protection.
Musk’s political controversies have also played a significant role in the decision. His public support for Germany’s far-right Alternative for Germany (AfD) party and its leader Alice Weidel has sparked backlash among European consumers. Protests and even vandalism, such as the painting of Nazi symbols on Tesla vehicles, have been reported. Furthermore, Musk’s dual role as head of the U.S. government’s Department of Government Efficiency (DOGE) has drawn criticism for conflicts of interest and overreach, adding to Tesla’s brand risks.
The politicization of Tesla’s brand under Musk’s leadership has turned it from a “green pioneer” to a symbol of political controversy. This shift has alienated consumers, particularly in Europe, where sales have plummeted. Investment risks have also risen, with 85% of investors in a Morgan Stanley survey stating that Musk’s political activities have negatively impacted Tesla’s business. These factors have led AkademikerPension to divest its remaining Tesla holdings, citing concerns over long-term returns.
The blacklisting is expected to have significant implications for Tesla. Its stock price and market confidence could further decline, with some analysts predicting a potential 50% drop. In Europe, Tesla’s market share has already fallen to 1%, as Chinese competitors like SAIC and BYD rapidly expand their presence. For investors, the decision underscores the importance of ESG risks and the dangers of over-reliance on a single founder’s influence. Tesla’s future may depend on governance reforms, improved labor relations, and a strategic shift to reduce Musk’s political associations with the brand.
In conclusion, AkademikerPension’s decision to blacklist Tesla highlights the company’s multifaceted challenges. Beyond short-term sales and stock price issues, it reflects deeper concerns about Tesla’s governance, brand positioning, and founder-related risks. Unless Tesla addresses these issues through structural reforms and strategic adjustments, similar investment withdrawals could continue, further eroding its leadership in the electric vehicle industry.