Tesla, under the leadership of CEO Elon Musk, has recently made headlines not for its innovations in electric vehicles but for its stark shift in stance on Diversity, Equity, and Inclusion (DEI) policies. In a move that has sparked widespread discussion, the electric car giant omitted all references to minority workers and outreach to minority communities from its 2023 annual 10-K filing with the SEC, a departure from its previous reports which highlighted the company’s commitment to DEI.
Previously, Tesla's filings underscored the diversity of its workplace and its initiatives aimed at fostering an inclusive environment. For instance, the 2022 10-K boasted of a "majority-minority workforce" and emphasized the importance of employee resource groups in driving initiatives to attract, develop, and retain talent.
Similarly, the 2021 and 2020 filings detailed Tesla's outreach to Historically Black Colleges and Universities, Hispanic Serving Institutions, and support for various employee groups. However, this year's filing made no mention of DEI efforts, reflecting a significant shift in the company's public stance on these issues.
This change aligns with Musk’s increasingly critical views on DEI, which he has expressed through social media, labeling DEI as "morally wrong" and equating it to racism.
The Broader Context: DEI in Corporate America
Tesla's revised stance comes at a time when DEI is a hotly debated topic in corporate America and beyond.
The discourse around DEI has intensified following the Supreme Court's decision to dismantle affirmative action in 2023 and the controversial ousting of Harvard’s first Black woman president, Claudine Gay. Billionaire investor Bill Ackman, a vocal critic of DEI, has found an ally in Musk, as evidenced by Musk's endorsement of Ackman’s arguments against DEI on social media.
Despite these high-profile denunciations, a survey by the employment law firm Littler indicates that many companies in the U.S. remain committed to, or have even increased, their DEI efforts since 2022. This commitment suggests a divide between the perspectives of certain influential figures and the broader trend in corporate DEI initiatives.
Challenges and Criticisms
Tesla's transition away from explicit DEI commitments occurs amidst ongoing challenges related to race and equity within the company. Notably, Tesla faced a racial discrimination lawsuit resulting in a $3 million penalty for the treatment of a former employee at its Fremont, California, plant. Such incidents highlight the complex landscape Tesla navigates as it adjusts its DEI strategy.