Norway Fund: Time to Divest from Tesla?

Norway’s massive sovereign wealth fund, holding nearly 36 million Tesla shares, faces a critical decision. Should they exit their position before further value erosion?

Ryan Cooper, March 28, 2025

Norges Bank manages Norway’s wealth, including the Government Pension Fund-Global (GPFG), owning about 1.5% of global public companies. With 35.7 million Tesla shares (roughly 1.1% of the company), a strategic sell-off is now warranted, both financially and ethically.

The Crumbling Business Case Against Tesla

Tesla’s long-term outlook appears bleak. Elon Musk’s controversial actions and associations have damaged Tesla’s brand among its core customer base. Furthermore, Tesla’s aging product line and the Cybertruck’s poor reception add to the company’s challenges. Competition is intensifying, with Hyundai, GM, and especially Chinese giants like BYD surpassing Tesla in innovation and market share.

Recent events have worsened Tesla’s situation. Musk’s polarizing behavior has generated negative publicity and protests. Sales are plummeting in key markets like the Netherlands (-34%), Germany (-71%), and China (-49%). Even in Norway, a once-strong market for Tesla, the company has fallen behind Toyota in EV sales.

The stock price remains artificially inflated by retail investor enthusiasm, but that sentiment is waning. Tesla’s valuation has dropped about 40% since January, wiping out $520 billion in market cap, yet it remains overvalued. With a price-to-earnings ratio significantly higher than competitors like Toyota and TSMC, a correction seems inevitable.

Musk’s promises of autonomous robotaxis and robots have failed to materialize. Experts doubt the profitability of driverless taxi services. Tesla’s inflated stock price is unsustainable, with executives selling shares en masse.

The Moral Imperative

Norges Bank isn’t a passive investor. The fund actively participates in shareholder votes and adheres to ethical investment principles. The fund’s website states the aim to “promote long-term value creation…and minimise negative effects on the environment and society.” Companies involved in serious human rights violations or unethical practices are blacklisted.

Musk’s actions, fueled by his Tesla wealth, have had severe consequences. His policies have slashed vital foreign aid, impacting programs like USAID and PEPFAR, potentially causing millions of deaths.

Furthermore, Musk’s interference in European politics, supporting far-right parties, raises serious concerns. His attack on Norges Bank Investment Management CEO for voting against his pay package highlights his disregard for ethical governance.

Therefore, Norges Bank should divest from Tesla immediately.

Categories: Europe, Norway, Elon Musk, Tesla, Automakers, Electric Vehicles, Financial Industry, Politics

By Ryan Cooper