Tesla, Inc. TSLA is facing growing tension in the Nordic region, as trade unions intensify pressure. This situation is reportedly reaching financial markets, with a collective of pension funds and asset managers directly appealing to CEO Elon Musk for a change in the company's approach.
Institutional investors from the Nordic region, overseeing a combined $1 trillion in assets, have expressed significant concerns regarding Tesla's stance on employee rights in Sweden, according to a news report by Bloomberg.
These investors are urging the EV behemoth to recognize collective bargaining agreements for its workforce, the report added, citing a letter sent on Thursday.
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Signatories to the letter include Denmark's Velliv Pension & Livsforsikring A/S and AkademikerPension, Bloomberg noted.
A group of at least 15 investors has criticized Tesla for challenging the "Nordic Model" by preventing mechanics at seven of its Swedish repair shops from signing an agreement encompassing fundamental rights like minimum pay and gender equality, the report read.
These investors also highlighted how this model has significantly contributed to Tesla's market share growth in the region, surpassing even Germany in terms of car deliveries, Bloomberg added.
Investors did not explicitly threaten to divest their Tesla shares in the letter, but signs of strain are emerging elsewhere.
Notably, Danish fund PensionDanmark A/S recently became the first major asset manager in the region to divest a $69 million stake in the electric vehicle maker, reflecting the conflict.
In the investor letter, the group requested for a meeting with Tesla's board in early 2024 to debate the matter.
"We as Nordic investors acknowledge the decade old tradition of collective bargaining, and therefore urge Tesla to reconsider your current approach to unions," they wrote, noted by Bloomberg.
Read Next: The Rise of American Tech Power: Apple's Market Value Challenges Entire French Stock Market
Price Action: TSLA shares are trading higher by 3.3% to $247.20 on the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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