Short sellers of Tesla have made an estimated $11.5 billion in profits so far this year, with market sentiment remaining negative ahead of the company’s upcoming quarterly earnings, according to a new report from S3 Partners.
Tesla (NASDAQ: TSLA) shares have plunged 40% year-to-date, and analysts are bracing for a disappointing earnings report. Deliveries from January through March dropped 13%, and the company has lost ground to competitors in China. Additionally, CEO Elon Musk’s involvement in political affairs through his role in the Trump administration has reportedly affected the brand’s image.
Short selling involves borrowing shares to sell them with the intention of buying them back at a lower price, profiting from the stock’s decline. This strategy has surged, with 10 million additional shares shorted this year—a 15% increase—making Tesla the most profitable short worldwide, ahead of Nvidia (NASDAQ: NVDA), where short sellers have earned $9.4 billion.
Matthew Unterman, managing director at S3, noted that rising short interest and declining sentiment place heavy importance on Tesla’s earnings results and future guidance. A breakout above current short interest resistance could indicate intensifying bearish sentiment, especially as analysts raise concerns about leadership priorities.
Dan Ives of Wedbush, a long-time Tesla supporter, recently urged Musk to either step away from politics or refocus on Tesla, suggesting his involvement with the U.S. Department of Government Efficiency (DOGE) is distracting from the company’s core mission.
Investors are also closely watching whether Tesla remains on track with plans to launch a more affordable vehicle and a robotaxi service this year. Unterman anticipates continued volatility, stating that the stock’s direction depends largely on Tesla’s ability to push back against growing market pessimism.
