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Eight state treasurers sent a letter to Tesla's board expressing concern about the company's leadership, writing, "Tesla’s recent performance signals deeper governance and leadership challenges that, if left unaddressed, could have serious consequences for the company and its stakeholders." One of the people who signed the letter is California State Controller Malia Cohen (Dem.). She explains why in the video above.
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Treasurers from eight US states penned an open letter to Tesla's board of directors citing concerns about CEO Elon Musk. In the letter, officials who oversee funds and investments for their respective states wrote that Musk's commitments outside of Tesla including his advisory role in the Trump Administration quote, raise serious questions about whether Tesla's leadership is fully engaged in addressing the company's core challenges. Joining me now, one of the officials behind that letter, California State Controller, Malia M. Cohen. Malia, thank you so much for being here. We appreciate it on this day that we heard from um Tesla and it talked about some of the challenges that it is facing. How, how often do you get together with your fellow officials and and pen a letter like this to an individual company that's in, that's in your portfolio?
Uh not very often, quite honestly. Uh, we have been in the process of organizing ourselves because we are just concerned. We're long-term, large institutional investors. We are fiduciaries and we're just concerned with our investment. You know, Tesla stock, as you heard from reported, uh lost uh 36%. That, that for me translates a $1.6 billion loss for the, the, the, the country's two largest pension funds, that's Calpers and Calsters. So we are very invested in the success of Tesla.
And so, when you, what do you think is most pivotal for Tesla to do here, um, to get back on, on track in your view? I mean, I, I asked another one of our guests, does Elon Musk need to get on the call today and say, I am almost done with my duties with the US government and I'm gonna be refocusing on the company?
Well, you know, Elon Musk is one, one, one part of the conversation. There's also a board, a board of directors that provide governance. And so certainly this board, if they are truly independent, have the authority to begin to exercise and put some parameters in place to ensure that the, the stock remains a good investment.
And so what are some of those parameters that you, that you think should be put in place?
So when we're talking about good governance, we mean we want good accurate reporting. We're talking about, um, paying attention to, to growth, to sales. Of course, um, this conversation around tariffs will and does have an impact. But what we are seeing is very little reaction to the impact of the administration's um, uh, policies in place. We are coming at this, uh, kind of with laser focus and quite honestly, I get asked to sign on many letters and uh, for the most part, I don't sign on to these letters. But this particular investment is absolutely critical because it has a multiplier effect across the entire state of California. Here's an example. There was a quarterly report that was issued just a few weeks ago for the first quarter of March, 15% uh, has uh Tesla cars down. So that means we're talking about new car registrations. If people are not purchasing cars or not registering their cars, that's a lost revenue for the state of California. Now I want to remind your viewers that in the state of California, we are already looking at somewhere between a 40 to possibly $70 billion deficit. So for my lens, the chief fiscal officer for the state of California, I want to look at the bottom line. This investment is absolutely critical to the retirees, to retired teachers. If we don't deliver on, on, um, on their, their benefits, then that means that the state of California has to, to unfund or to fund this liability.
So is this why then you don't just wanna exit the stock for example? You still have have hope there that the Tesla's gonna recover?
That's a good question. No, we don't want to exit the stock. As a matter of fact, we want the stock to, to, to rally and to bounce back. However, that's not to say that during public comment we have heard from numerous, um, um retirees that want us to divest, that want us to pull our money out of this asset. And uh, so far we've taken a position against that.
Malia Cohen, thank you so much. Appreciate that.
Thank you.
