Lehigh County, Pennsylvania, has become the first known U.S. pension fund to stop buying new Tesla stock, citing concerns over CEO Elon Musk‘s political activities and the company’s declining financial performance. According to a Business Insider report, the county’s pension board, which manages $500 million in assets, voted 4-2 on May 6, 2025, to pause new investments in the electric vehicle (EV) giant, reflecting a growing trend among global funds divesting from Tesla.

Tesla’s Financial Struggles and Shareholder Concerns

Tesla has faced significant headwinds in 2025. The company’s stock has dropped over 27% since the start of the year, with Q1 revenue missing expectations. Mark Pinsley, the Lehigh County controller who introduced the motion, highlighted Tesla’s financial decline, stating, “Tesla’s earnings are down 71% from a year ago, their auto revenues have dropped 20%, and profitability has taken a sharp dive.” Pinsley emphasized the responsibility to retirees, adding, “We owe it to our retirees and taxpayers to take a hard look at whether these are wise investments at this time.”

The decision also reflects broader shareholder unrest. Globally, pension funds in the Netherlands and Denmark have divested from Tesla, offloading stakes worth $600 million and $20 billion, respectively. In the U.S., New York State legislators and the American Federation of Teachers have urged major asset managers like BlackRock and Vanguard to reconsider their Tesla holdings, pointing to Musk’s political involvement as a risk to the company’s stability.

Lehigh County Pension Fund Halts New Tesla Stock Purchases Amid Elon Musk Controversy

Impact on Tesla’s EV Market Position

Tesla’s challenges extend beyond stock performance. The company’s auto revenue decline signals weakening demand for its EVs, including models like the Model 3 and Model Y, which have historically dominated the market. Marketing experts told Business Insider that Tesla may have alienated its core customer base—environmentally conscious buyers—due to Musk’s political stances, potentially necessitating a rebranding effort. David J. Reibstein, a marketing professor at the Wharton School, noted, “For the other shareholders who are bailing on the company, that’s problematic.”

Operationally, Tesla faces increased competition from EV makers like Rivian and Lucid, who are gaining traction with more affordable models. Tesla’s focus on autonomous driving technology, such as its Full Self-Driving (FSD) system, has also drawn scrutiny, with regulatory bodies in the U.S. and Europe investigating its safety claims. These factors could further erode Tesla’s market share if consumer trust continues to wane.

Growing Divestment Trend Among Pension Funds

The Lehigh County decision is part of a larger movement. In March 2025, New York City’s comptroller race saw candidates pledge to divest the city’s $300 billion pension portfolio from Tesla, with its holdings dropping from $1.26 billion on December 31 to $831 million by March 28. In April, eight U.S. state treasurers wrote to Tesla’s board, expressing concerns over Musk’s lack of focus on the company. The Tesla Takedown movement, which emerged in protest of Musk’s political activities, is now pushing for broader divestment, aiming to influence cities and states to cut ties with “all things Musk.”

EVXL’s Take: A Bumpy Road Ahead for Tesla Owners

For Tesla owners and EV enthusiasts, this news signals a rocky period. Declining stock value and divestment might limit Tesla’s ability to invest in new tech—like next-gen batteries or faster Supercharger networks—that keeps your Model S zipping along. Musk’s promise to step back from political activities could help, but as EVXL sees it, Tesla might need a “Back to the Future” moment to regain its spark—less DeLorean drama, more focus on what made it the EV king. For now, keep an eye on your local charging stations; competition might just bring better options to the lot.

Photos courtesy of Tesla