On Thursday, the electric vehicle maker was told by a Swedish court that a labor union blockade of its mail would not be lifted, pending the final decision of the case. The initial ruling means the company still cannot receive license plates, effectively pausing the delivery of cars to customers in its fifth biggest market in Europe.

Tesla didn’t provide strong enough arguments “as to why the company would suffer harm from these parcels not being handed out” before the case concludes, the court said in a statement.  

Postal workers are refusing to deliver Tesla’s mail in a sympathy action with employees at seven Swedish repair shops, who were called to strike in October as a result of the US company’s refusal to sign a collective agreement covering basic rights such as pay levels and working hours.

Thursday also saw the first major institutional investor in the region publicly dump shares in Tesla in response to the dispute. Danish pension group PensionDanmark A/S didn’t disclose the size of its stake to Bloomberg, but local media Frihedsbrevet reported it was about 400 million kroner ($58 million). 

The breakdown in relations has spread into neighboring Denmark and Norway, where unions have warned they will block shipments of Tesla cars. In Finland, the Transport Workers’ Union decided to enforce the embargo across all of the country’s ports starting Dec. 20, after Swedish unions asked Nordic peers to join in sympathy actions.

“It’s a crucial part of the Nordic labor market model that we have collective agreements and unions support each other,” said Ismo Kokko, president of the Finnish union. Action by the Finnish port workers means Tesla vehicles or components destined to Swedish markets are not loaded by dockers, the union said in a statement.

Thursday’s legal setback comes a day after another Swedish court — in a separate lawsuit brought against the Transport Agency — withdrew a ruling favorable to Tesla that had allowed the carmaker to pick up license plates for new vehicles directly from the company that makes them instead of relying on postal workers.

‘Very significant risks’

While no other Nordic pension funds have added Tesla to their exclusion list, investor pressure is beginning to be applied on the carmaker. 

Velliv Pension & Livsforsikring A/S, which manages about $47 billion, told Bloomberg it was “aware of the challenges associated with Tesla” and expected the company to change its behavior, a spokesperson said by email. The fund said it has contacted its ESG surveillance partners asking them to initiate a dialog with Musk’s firm on behalf of Velliv and other investors.

PensionDanmark, the fund exiting Tesla, said it had initially contacted the company in an effort to persuade the company to sign a labor agreement. Tesla’s chief executive has called the Swedish labor action “insane.”

“As the conflict now spreads to Denmark and because of Tesla’s recent very categorical refusal to sign agreements in any country, we’ve come to the conclusion that we as investors at the moment aren’t able to influence the company,” the fund said by email. “That’s why we’re now putting Tesla on our exclusion list.”

The chairman of the 3F union that’s behind the Danish strike, Jan Villadsen, is also a member of PensionDanmark’s board. The fund has more than 800,000 members and $45 billion in total assets.

In Sweden, the joint ethics council of the state-owned AP Funds — whose combined assets total about $247 billion — has reached out to Tesla to discuss workers’ rights and is “following the development closely,” Chief Active Ownership Officer Anna Magnusson said in emailed comments.

The chief executive running another Danish fund, AkademikerPension, which has about $24 billion in assets, said Tesla’s stance on labor rights means it has long been included on the fund’s watchlist for investments it monitors more closely. 

“It seems it hasn’t dawned on Tesla’s management that proper working conditions create more value and fewer risks in companies,” CEO Jens Munch Holst said by email. “The labor dispute may spread, and as an investor we see very significant risks in relation to Tesla’s ability to conduct business and thus provide a reasonable return to our members.”