It appears that the headaches for Tesla continue to pile up: a major Australian fund manager, BetaShares, has officially eliminated the EV maker from its exchange-traded fund, citing environmental and labour concerns.
Despite being Wall Street’s and Silicon Valley’s sweetheart, Tesla has failed to appease a major fund manager in Australia. According to Business Insider, the nearly $600 billion market cap company has been erased from ETHI, a sustainability-focused ETF run by BetaShares. The fund’s chief investment officer, Louis Crous, has grown annoyed with what appear to be infinite controversies surrounding Tesla.
“Tesla is still definitely a carbon leader…but it has fallen foul of our [environmental, social and governance] screens which resulted in its removal,” Crous explained to Business Insider. “During May last year at the height of the COVID pandemic, Tesla reopened its factory in Fremont, California, despite the orders of the local authorities, resulting in quite a large number of COVID cases. New reports have indicated that there was a significantly larger outbreak than was previously reported, so we have numbers from one to 50 COVID cases related to the factory.”
The fund manager has revealed he has been planning the farewell for quite some time, but has finally decided to dump its $60 million stake following an onslaught of new evidence and “controversies and reputation issues.” Crous specifically pointed to Tesla’s growing negative externalities in Germany, where it is in the midst of building a new Gigafactory. “German media reports that Tesla’s factory in Brandenburg will consume about 3.6 million cubic metres of water per year, which is roughly around 30% of the total water in the region. Some experts believe this will lead to restrictions on drinking water.”
At the same time, in China, the EV maker is being accused of labour exploitation. Back in December 2020, NGO the Tech Transparency Project has revealed that Tesla’s supply chain is associated with Lens Technology, which in turn is currently facing accusations of “directly benefiting from the use of state-sponsored forced labor provided by Uighurs and other minority Muslim groups in China.”
Information for this briefing was found via Business Insider. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.