The American Federation of Teachers has openly questioned Tesla's valuation, urging top asset managers to review investments in the electric vehicle maker.

In letters sent to asset managers including BlackRock, Vanguard, and State Street, the AFT warned that Tesla's market decline poses a considerable risk to teacher pensions, which have an estimated $4 trillion of members' deferred wages invested, AFT President Randi Weingarten said.

The union argued that Tesla stock's aggressive tumble is a growing threat to teachers' retirement funds. The shares are down 42.5% from a mid-December peak, and At $275 per share, they're trading nearly at pre-election levels.

"I'm asking the experts, because frankly, if the stock all of a sudden goes down even more precipitously than it has, and tens of billions of dollars are invested in it, then how do you create the replacement income in terms of these retirements?" Weingarten told Yahoo Finance on Monday.

At least one of the letters cites a projected price target of $135 for Tesla stock, quoting recent JPMorgan commentary that the shares are "completely divorced" of fundamentals.

But the fundamentals themselves are also driving the union's skittishness.

"Tesla's latest financial disclosures should raise alarms," the letter said, citing a 23% profit decline and 71% revenue drop year-over-year. Regarding missed fourth-quarter margin expectations, it added, "These are not isolated incidents but rather a troubling pattern that suggests Tesla's pricing power is eroding, leaving it vulnerable to market fluctuations and increased competition."

Recent weeks have fuelled the bear case for Tesla, as data from China and Europe reveal declining sales of the company's EVs and heightened competition.

According to the German Federal Motor Transport Authority, sales in Germany plummeted 76% in February.

Such trends have caught the attention of other investors as well.

Ross Gerber, a Tesla-believer-turned-bear, now expects the stock to see even more pain in 2025. While he remains a shareholder, he told Business Insider that he's whittled down his firm's position and he's pessimistic about Tesla's premium valuation.