CalPERS Keeps Tesla Stake as Top-10 Performance Driver and Climate Transition Holding
Updated
Updated · CalMatters · May 11
CalPERS Keeps Tesla Stake as Top-10 Performance Driver and Climate Transition Holding
9 articles · Updated · CalMatters · May 11
CalPERS decided after a March closed-door review to keep its Tesla shares unchanged, despite a months-long campaign urging the pension fund to divest.
Tesla was one of the top 10 drivers of CalPERS' global equity performance, and board member Kevin Palkki said it remains a key holding in the fund's climate transition portfolio.
The pressure campaign had intensified since September, when the board ordered a risk assessment citing Tesla's volatility, weaker sales and regulatory scrutiny over self-driving technology; CalPERS has also repeatedly voted against Elon Musk's pay packages.
The Tesla fight sits inside broader divestment battles at CalPERS and CalSTRS, whose roughly $1 trillion combined assets are being targeted by activists over fossil fuels, Palantir, immigrant-detention companies and private equity labor practices.
Those debates are sharpened by the funds' underfunded status—assets cover about 80% of liabilities—making staff resistant to divestment or legislative limits they say could hurt returns.
Is private equity a ticking time bomb for public employee retirement funds?
With federal rules tightening, can public pensions legally divest for social reasons?
CalPERS’ $100 Billion Climate Ambition: Navigating Tesla’s Volatility, Governance, and the Future of Sustainable Pension Investing
Overview
In March 2026, CalPERS chose to maintain its stake in Tesla despite significant market volatility and political scrutiny. This decision came as Tesla reported a notable decline in vehicle deliveries, missing Wall Street expectations and facing increased competition. The move highlighted how investment choices for high-profile companies like Tesla can be influenced by both financial performance and political considerations. CalPERS’ approach reflects its need to balance fiduciary duty with broader pressures, showing how large funds must weigh market realities, public perception, and long-term strategy when making investment decisions.