Teacher Union Questions Investment in Tesla

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Last Updated on: 6th March 2025, 12:44 am

Tesla sales were down in 2024. The company was supposed to be growing at 50% a year. Its sales appear to be down much more this year, all while Elon Musk is taking a chainsaw to the US government (his own metaphor). Some see the latter as a good thing. I consider those people misinformed and misled — I don’t think most of them want the worst, but it’s also clear they’re being exposed to propaganda and lacking a lot of important context. There are countless reasons I could explain why, but that’ll probably get pushed to another article or left to other outlets to cover. With one statement of misinformation from Musk after another, though, and the Tesla brand taking a massive hit, many who had invested in Tesla for years have been questioning their investments. In fact, we’ve had numerous readers share that they were early investors and sold all of their stock or are in the process of doing so.

Aside from the brand damage, people are just shocked at how wrong Musk has been on issue after issue, and have thus had their faith in his judgement as CEO of Tesla shaken. On the Tesla front, there’s also a question of how much time Musk could be spending on Tesla work when he’s engaged in DOGE stuff so much and tweeting almost constantly. In fact, on that matter, in recent years, based on his tweeting patterns, it seems doubtful that he’s even been making much time for sleep. And, when you think about it, even with great sleep deprivation, what five things has he accomplished at Tesla in the past week?

Combining all of this with the fact that the Trump administration is dismantling one federal agency after another and seemingly going after the Department of Education soon, it is no surprise that members of the American Federation of Teachers (AFT), a teacher labor union, are getting a bit spooked and seriously questioning their investment in Tesla [NASDAQ:TSLA].

“The American Federation of Teachers (AFT) labor union is urging asset management firms to reconsider Tesla’s (TSLA) valuation, highlighting particular concerns tied to potential risks for teacher pension funds, which have millions invested in the EV maker,” Yahoo!Finance reports. “The union leaders is seeking clearer directives from asset manages: ‘Should we be divesting or not? Should we keep the stock or should we not keep the stock?’”

AFT President Randi Weingarten believes asset managers are going about their jobs in a cowardly way out of fear for upsetting Musk. “Don’t get cowed by the fact that Musk has a lot of power in this administration. Do your job because we are really concerned about teacher retirement benefits and their assets.” They are concerned that if TSLA does crash, asset managers won’t act fast enough and won’t have a half-decent solution.

To be fair, asset managers were largely blind to TSLA’s rise, and said it wasn’t smart to invest in the company for years as it was growing and succeeding, proving critics wrong. Then the company became profitable and they started piling in. It seems to me that asset managers are quite sheep like and just like to expect things will more or less stay the same. At the moment, my hunch is that they’re scared to assume Tesla sales won’t rebound, are waiting to see if they updated Model Y shoots sales up again, are waiting to find out more about a more affordable “Tesla Model Q” (funny choice of names, I know) that is supposed to be coming, and are assuming Tesla Full Self Driving will lead to robotaxis in the next year or two. Otherwise, it’s hard to understand how anyone can look at what’s been happening and not see Tesla’s market cap as being far above anything that makes sense.

But, hey, I’m just a foolish investor. Maybe I’ve got the whole story wrong and asset managers holding onto TSLA are wiser than me and wiser than the American Federation of Teachers. We’ll see in the coming months how things trend at Tesla and what is accomplished.