Swedish Pension Fund Blacklists Tesla, Divests $1.36 Billion Stake Over Labor Rights Violations

A major Swedish pension fund, AP7, has blacklisted Tesla and divested its entire stake, valued at approximately $1.36 billion. The fund cited "verified violations of labor rights in the United States" as the primary reason for its decision, following years of dialogue and shareholder proposals that failed to prompt sufficient action from the automaker.

Swedish Pension Fund Divests From Tesla Over Labor Concerns

AP7, a prominent Swedish pension fund, announced its decision to blacklist Tesla and liquidate its substantial holdings in the electric vehicle manufacturer. The move, which saw the fund sell off its entire stake worth around $1.36 billion in late May, stems from what AP7 describes as "verified violations of labor rights in the United States."

Key Takeaways

• AP7, a Swedish pension fund, has blacklisted Tesla and sold its entire $1.36 billion stake.

• The decision is based on "verified violations of labor rights in the United States.

• This divestment follows years of unsuccessful dialogue and shareholder proposals aimed at addressing labor issues.

Reasons For Divestment

While some other funds have reduced their Tesla holdings due to CEO Elon Musk's political involvement, AP7 explicitly stated its decision was unrelated to Musk's political stances or government involvement. Instead, the fund emphasized that its action was a direct consequence of documented labor rights violations.

AP7's spokesperson confirmed that Tesla constituted about 1 percent of the AP7 Equity Fund, amounting to roughly 13 billion crowns before the sale. The fund's total assets were approximately 1,181 billion crowns at the end of May.

Tesla's Labor Challenges

Tesla has faced numerous labor-related lawsuits and claims in recent years. These include allegations of:

• Restrictions against labor union supporters, with claims that courts favored Tesla's argument regarding loose-fitting clothing as a safety hazard over pro-union attire.

• Claims of racism at the Fremont Factory, notably from former elevator contractor Owen Diaz. Diaz was initially awarded $137 million, which was later reduced to $15 million by a U.S. District Judge. Diaz rejected this reduced sum, and a subsequent jury awarded him $3.2 million. Ultimately, Diaz and Tesla reached an undisclosed settlement.

AP7 did not specify the exact current labor violations that triggered its decision, but the fund's statement indicates a long-standing concern that Tesla has not adequately addressed these issues despite ongoing dialogue and collaborative shareholder proposals.