Tesla Short Sellers Lose $3.5 Billion in Two Days After Deliveries Report

Tesla’s better-than-expected deliveries report has caused significant losses for traders betting against the electric vehicle maker’s stock. Following the second-quarter report, Tesla shares surged by 17% over two trading days, resulting in an estimated $3.5 billion in mark-to-market losses for short sellers, according to data from S3 Partners.

The recent surge in Tesla’s stock price has compounded the challenges faced by short sellers, with Tesla shares climbing 73% since hitting their yearly low in April. On Wednesday, Tesla’s stock closed at $246.39, nearly recovering its year-to-date losses.

Tesla reported second-quarter deliveries of 443,956 vehicles, surpassing Wall Street’s estimate of 439,000. While this represents a 4.8% decline from the previous year, it is an improvement over the 8.5% year-over-year drop in the first quarter. Despite the sales decline and increasing competition, the report suggests that demand for Tesla vehicles remains strong.

The deliveries report, however, provides only a limited view of Tesla’s overall performance. The company has been offering incentives such as discounts and low-interest financing to boost sales amid an aging lineup and heightened competition. The launch of Tesla’s newest model, the Cybertruck, has been slow, plagued by quality issues leading to four voluntary recalls in the U.S. within a year.

Tesla’s upcoming earnings report, due later this month, will offer more insight into the company’s financial health. Analysts expect a 2.9% revenue decline to $24.2 billion, following a 9% drop in the first quarter.

Tesla CEO Elon Musk, whose net worth increased by approximately $15 billion over the past two days, celebrated the short sellers’ losses. Musk also targeted Microsoft co-founder Bill Gates, who has a history of shorting Tesla stock. Musk stated on X (formerly Twitter) that short sellers would be “obliterated” once Tesla solves autonomy and mass-produces its Optimus robot.

Despite these developments, Tesla continues to face challenges in its core automotive business. The company frequently updates its in-vehicle software, with recent enhancements including YouTube, Amazon Music, and weather apps for drivers. However, Tesla has yet to deliver software capable of making its cars fully self-driving.