The Tesla Ethicist: How Can I Reconcile My Tesla Stock Gains With Musk’s Skewed Self-Interest?

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Today, CleanTechnica’s Tesla Ethicist columnist answers a question about the tensions among being true to one’s morals, Tesla CEO Elon Musk’s absolutist tendencies, and personal Tesla stock portfolios increases.

Dear Tesla Ethicist:

I’ve always prided myself on my personal wherewithal. I self-financed my own college education by working and extending the typical amount of years it takes to matriculate from undergraduate and graduate work. I’m proud of my public sector career trajectory and my ability to save and invest as a way to secure a relatively comfortable retirement.

Part of my worldview has always been to live in sync with nature. I’ve been an avid gardener and outdoors-lover, hiking the Grand Canyon in my youth, joining in Earth Day celebrations, and savoring the fauna where I’ve lived. In the 2010s I learned about Elon Musk and his quest to “help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy.” That really appealed to me, so I purchased one Tesla stock share here, another there. Never really becoming a player in the market, I nonetheless found great pride in seeing my small Tesla investments flourish. I thought the Tesla CEO was an innovator and visionary and that, by becoming part of the Tesla family, I was part of something much bigger than myself.

Then came his inability to meet stated goals and increasingly erratic behavior. My original bubble of exuberance burst over the last couple of years with Musk’s various outrageous public statements, his abandonment of the Democratic Party in favor of big business gains, and his recently revealed courtship of Russian dictator Vladimir Putin.

Now the Democrats have fallen precipitously from power, and Musk has tied his wagon to authoritarian Donald Trump. Musk’s influence is expected to be significant at a time when he already holds considerable power, in part due to his role as a major contractor with the US Department of Defense through his ownership of the Starlink satellite broadband system in addition to his role as CEO of Tesla.

Already the world’s richest person, Musk stands to benefit greatly from his ties with Trump, and Tesla shares skyrocketed last week after the presidential election. Musk donated millions of dollars to Trump’s campaign, and Trump has said he would establish a government efficiency commission headed by Musk to cut federal spending.

Can I in good conscience continue to hold onto my Tesla stock when to do so contradicts everything I believe in regarding environmental justice and respect for all?

Signed,

A Troubled Tesla Shareholder

From the Tesla Ethicist:

Business ethics expert JS Nelson points out how Musk has drawn attention for violating much of the “social contract with employees, investors, suppliers, regulators, and other parts of his ecosystem.” In an interview with Harvard Law Today, Nelson explains that business ethics are how we behave in the business context, and our behaviors have an impact on the business world around us. Behaving ethically is important to our lives, to our well-being, to society, and to how we make money. Musk has a trust deficit these days, as his questionable ethics affect his different ventures.

For instance, the safety advocacy group The Dawn Project and others have been reporting safety defects to Tesla for years. There are a lot of innovative companies that don’t move fast and break things.

Musk “presents himself,” New York Times Magazine writer Christopher Cox says, “as a man who simply embraces astonishing amounts of present-day risk in the rational assumption of future gains.” (The Magazine issue is titled, “Elon Musk’s Appetite for Destruction.”) Musk has maneuvered the social media platform he bought in 2022 and renamed it X to promote his far-right political interests. As Just Security chronicles, Musk restored accounts of far-right figures such as white nationalist Nick Fuentes and conspiracy theorist Alex Jones, relaxed content moderation policies, and disposed of much of the company’s trust and safety and election integrity teams.

Many former Tesla aficionados have expressed their dismay over revelations about Musk’s private life and other uncomfortable circumstances and have worried that his often outrageous antics seeped into the Tesla brand identity. Elon Musk is a product of the system that we have created, though, ethics expert Nelson reminds us. He has been rewarded in the short term for a lot of really bad behavior, which “would have greater repercussions for anybody else.” It’s a distorted view of business reality that signal to others that they, too, can behave the way that he has.

As a result, what do we do when we find ourselves confronting self-awareness and our own ethical flexibility when it comes to our personal investments?

Lots of Tesla shareholders have refused to stay the course in light of Musk’s pedo guy accusations, attacks on the Anti-Defamation League, conspiracy theorist posts, disinformation, and poop emojis. These shareholders realize that too many people behaving in ways that challenge the public trust destabilizes our system. They concede that a purely transactional approach toward people is dangerous for any business.

Tesla’s stock price has been on a roller-coaster ride in 2024. It was down 43% for the year on April 22. Investors who counted on Tesla’s incremental growth lost money then — some of which were quite large amounts of money. But Tesla stock value has slowly climbed since — and then the Trump effect took place.

Your dilemma seems to fall within the category of ethical investing, where investment strategizing is tied to the investor’s ethical values (moral, religious, social) — along with good returns. These generally include socially responsible investing funds; environmental, social and governance (ESG) funds; impact funds; or faith-based funds. If your investment was in one of these funds rather than Tesla, you’d benefit emotionally and financially when those company shares the same values as you do.

But that’s not really why you invested with Tesla stock to begin with, is it? You saw an opportunity to sneak in on an innovative practice tied in a nice bundle of technology and futuristic personal transportation. Personal finance company Kiplinger offers a slightly modified view about adhering to your principles when investing that may help inform you. Their analysts note that your principles are important to you, and you want to make them a key player in your investment decisions, which is admirable. However — and here’s the rub — just like with any other investment decision, it’s important to be smart about how you go about it.

If you want to incorporate values into your portfolio, be transparent with your financial advisers so they can act on your behalf to research stocks or funds that align with your preferences. If you want to stay on the Tesla bandwagon, you’ve already experienced a rough ride over the last year+ — hold onto your seat and be ready for more rocky roads. We’ve seen Musk’s pattern, so we know there’s more turmoil to come.