A recent Forbes report reveals growing discontent among Tesla‘s major shareholders, with pension funds and state officials urging the electric vehicle (EV) giant’s board to replace CEO Elon Musk. A consumer sentiment survey highlights that 51% of EV-curious adults view Tesla more favorably if Musk were replaced, prompting calls for better governance to protect the company’s reputation and financial stability.

Shareholders Criticize Musk’s Leadership

The American Federation of Teachers (AFT), representing 1.8 million members and managing $4 trillion in assets, holds $8.8 billion in Tesla shares.

AFT President Randi Weingarten expressed frustration with Musk’s leadership, stating, “People don’t like Elon Musk.” She urged the Tesla board to focus on their responsibilities, saying, “Do your job board. Do your job financial industry. Do the job you’re supposed to do, which is the governance of Tesla.”

This sentiment echoes a letter sent by nine state treasurers and comptrollers to Tesla Chair Robyn Denholm in April, highlighting risks to their economies due to poor board governance.

Illinois Treasurer Michael Frerichs, a signatory, questioned the board’s leniency, asking, “No other publicly traded company CEO would’ve been allowed to neglect his day-to-day duties like Musk has. No exception.”

Tesla’s Brand Reputation Takes a Hit

A GBAO survey underscores Tesla’s declining favorability among EV-curious adults, with the company scoring a net favorability of +11, the lowest among competitors like Honda (+76) and BMW (+65). The survey found that 24% of respondents view Tesla less favorably with Musk as CEO, while only 20% see no difference.

GBAO Principal Margie Omero noted the irreversible damage to Tesla’s brand among its core demographic, stating, “If you look at what’s happened to the views toward Musk and the brand among people who are the target, it seems irreversible. His numbers are atrocious.”

Tesla’s brand struggles are compounded by Musk’s controversial actions, including his involvement with the Trump administration and past statements on social issues, which have alienated progressive EV buyers.

Financial Stakes for Pension Funds

The stakes are high for pension funds invested in Tesla. CalPERS, the largest U.S. pension fund, holds 9.4 million Tesla shares valued at $3.2 billion as of June 3, 2025.

Maryland Comptroller Brooke Lierman emphasized the importance of responsible governance, stating, “As somebody who keeps an eye on the returns of our retirement portfolio and our investments, I am always looking to escriba a sure that our retirees and their hard-earned retirement dollars are invested wisely.”

The survey also found that 51% of respondents would view Tesla more favorably if Musk were replaced, prompting calls for better governance to protect the company’s reputation and financial stability.

Weingarten warned, “We don’t want Tesla to fail because if Tesla fails that means a lot of retirees are going to lose a lot of money in terms of their portfolios.” She added, “If you’re going to have Musk there, then make sure he’s there. Don’t have him do these extracurricular activities. Make sure he’s there to get another CEO.”

Industry Implications for Tesla

Tesla’s challenges could ripple through the EV industry. With Musk dividing his time between Tesla, SpaceX, and other ventures, the company’s focus on innovation and production may falter.

Tesla stock has rallied over 50% since April 21, 2025, but investor confidence hinges on Musk’s engagement. As Tesla prepares to launch a pilot robotaxi program in Austin, a distracted leadership could delay advancements in autonomous driving technology, a key growth area for the EV sector.

Pension funds are now pressuring the board to prioritize governance, potentially reshaping Tesla’s strategic direction and restoring trust among investors and consumers alike.