Major Teachers Union Urges Top Asset Managers to Review Investments in Tesla

NEW YORK—Today, AFT President Randi Weingarten sent a letter to the CEOs of the biggest money managers in the country—Blackrock, Vanguard, State Street, T. Rowe Price, Fidelity and TIAA—urging that they take immediate action to review investments in Tesla, a company in apparent severe decline and at grave risk of further devaluation. Tesla stock has plunged 23 percent this year, while the Nasdaq is down just 1.3 percent.

AFT members’ deferred wages are invested in pension funds totaling an estimated $4 trillion, which include a material amount of the automaker’s shares. In addition to these funds, teachers and nurses have billions of their own savings in direct contribution pension plans managed by these massive asset managers.

The AFT Trustee Council is made up of more than 50 AFT members who serve as trustees on public pension funds—representing 27 public pension funds—including some of the largest in the country: the California State Teachers’ Retirement System, the New York State Teachers’ Retirement System, the Teachers’ Retirement System of the City of New York, and the Teachers’ Retirement System of the State of Illinois. For over a decade, the AFT has supported trustees with tools and resources like the AFT asset manager reports, which evaluate investments in companies with reputational risk, such as gun manufacturers and private prisons, and it provides guides to help trustees assess investments in private equity.

AFT President Randi Weingarten said: “This is about safeguarding workers’ retirements. Less than a month ago, when J.P. Morgan analysts wrote that Tesla shares ‘continue to strike us as having become completely divorced from the fundamentals,’ we got concerned. And we’ve gotten more and more worried as the days and weeks have worn on, because we’re talking about working people’s deferred wages and retirement income. Just this week, we saw Tesla stock continue to sink faster than a Cybertruck in quicksand, as European sales fell off a cliff. So, we knew we needed to act.”

In the letter, Weingarten writes, “Tesla’s latest financial disclosures should raise alarms. The company reported an operating income of $1.6 billion for the fourth quarter of 2024 and a 23 percent year-over-year decrease in profits. It made $2.31 billion last quarter, down 71 percent from the $7.93 billion profit in the same period in 2023. Tesla’s vehicle profit margin slipped to 13.6 percent in Q4, missing expectations and underscoring rising cost pressures. These are not isolated incidents but rather a troubling pattern that suggests Tesla’s pricing power is eroding, leaving it vulnerable to market fluctuations and increased competition.”

Given these mounting concerns and the potential material impact on teachers’ and nurses’ pension portfolios and retirement savings, Weingarten is asking for a response from asset managers detailing their firms’ assessment of Tesla’s current valuation and the steps they are taking to protect AFT members who are their clients and beneficiaries.

The full letter can be read here.