The market is speaking, and it's not whispering—it's roaring. Tesla short sellers have pocketed a staggering $11.5 billion in 2025 so far, fueled by a brutal 40% decline in Tesla’s share price since the start of the year. That’s not just a win—it’s a beatdown. As Wall Street braces for Tesla’s upcoming quarterly earnings, investor sentiment has shifted from cautious optimism to outright bearishness.
Tesla’s stock has been bleeding, and it’s not just the charts that look grim. Deliveries in the first quarter fell by 13%, dragging the company’s momentum into reverse. Competition from Chinese electric vehicle manufacturers is heating up, and Tesla is losing ground. But perhaps the most polarizing factor isn’t coming from Shanghai or Berlin—it’s coming from Washington, where Elon Musk’s political entanglements are drawing scrutiny from both analysts and shareholders.
S3 Partners, the Wall Street analytics firm known for tracking short-selling data, reports that Tesla is currently the single most profitable short in the global market. That means more traders are betting against Tesla than against any other company on the planet—including high-flying chipmaker Nvidia. According to Matthew Unterman, managing director at S3, Tesla short interest has climbed by over 10 million shares this year, now representing about 15% of its float. That’s a flashing red light for market confidence.
With this kind of positioning, the market isn't just skeptical—it's downright hostile.
As Unterman explains, “With short interest climbing and sentiment deteriorating, Tesla's post-earnings path hinges on results and guidance clarity.” In other words, Tesla's next move has to be pitch-perfect, or this wave of short-selling could turn into a tsunami. A confirmed break above the recent ceiling of short interest, Unterman adds, would signal “deepening bearish conviction,” especially given that even longtime bulls are starting to question the company’s leadership.
One of those bulls is Dan Ives of Wedbush Securities. Known for his consistently bullish stance on Tesla, Ives has recently voiced concerns that could rattle even the most loyal Tesla investor. Earlier this month, he urged Musk to either “exit stage left” or refocus his efforts on Tesla, rather than juggling political ambitions within the Trump administration’s Department of Government Efficiency—ironically abbreviated as DOGE, a nod to Musk’s favorite cryptocurrency.
Musk’s political involvement is raising eyebrows—and for good reason. While his ties to Washington may seem strategic, they’ve also led to accusations of distraction and conflict of interest. And when it comes to Tesla, investors want their CEO laser-focused on innovation, production, and profitability—not regulatory reform or political theatrics.
With earnings just around the corner, all eyes are on whether Tesla can deliver more than just headlines. Investors are anxiously awaiting updates on the long-promised affordable EV model, as well as the company’s ambitious rollout of a robotaxi service. Both initiatives could inject new life into Tesla’s story—but only if they’re real, imminent, and convincing. If not, the selloff may only accelerate.
In the days leading up to the earnings call, Tesla stock has been anything but stable. After a three-day losing streak, shares rebounded 6% to about $241 on Tuesday. Was it a dead-cat bounce or the beginning of a reversal? No one knows for sure. What is certain is this: Tesla is sitting on the edge of a financial knife, and any slip could be catastrophic—or revolutionary.
What makes this moment so defining isn’t just the financial data. It’s the convergence of performance, perception, and politics. Tesla isn’t just an automaker anymore. It’s a cultural lightning rod, a stock market sensation, and a barometer of belief in the future. But when that future feels murky, investors hedge their bets—and increasingly, that means betting against Musk.
The mood among institutional investors is sobering. With short interest climbing and bearish sentiment hitting a crescendo, Tesla’s earnings call has taken on an outsized significance. One misstep, one vague answer, or one disappointing forecast could push sentiment into full-on panic mode.
But if Tesla surprises to the upside? That could spark a short squeeze for the ages—an epic reversal that would leave the bears scrambling to cover their positions. This is the kind of moment that defines not just quarters, but careers.
For now, the scoreboard favors the bears. But in this game, the final whistle hasn’t blown. And with Musk at the helm—flawed, brilliant, unpredictable—it never really does.
Conclusion
Tesla is no stranger to volatility, but 2025 is shaping up to be one of its most treacherous years yet. With short sellers riding high and investor confidence wavering, the company faces a critical inflection point. Earnings results will either reinforce the bearish narrative or ignite a counterattack that could rewrite the script. For now, the market waits—bracing for impact.
