On July 4th, it was reported that Tesla’s Q2 vehicle deliveries exceeded expectations, posing a significant setback for traders shorting Tesla stock.
According to S3 Partners, the stock surged 17% over two days, resulting in short sellers losing around $3.5 billion.
Since bottoming out in April, Tesla’s stock has risen 73%, closing at $246.39 on Wednesday, nearing a full recovery for the year. Currently, 3.5% of Tesla’s outstanding shares are shorted, equivalent to 97 million shares worth $22.4 billion.
Tesla reported Q2 deliveries of 443,956 vehicles, surpassing Wall Street’s estimate of 439,000, although it marked a 4.8% year-over-year decline, less severe than Q1’s 8.5% drop.
While the delivery report indicates robust demand, it only partially reflects Tesla’s performance.
Amidst aging models and growing competition, Tesla has employed discounts, low-interest loans, and other incentives to boost EV sales.
For example, in Q2, Tesla cut prices in Germany and Norway and offered zero-interest loans, covering even entry-level Model 3 and Model Y models.
In the U.S., buyers of rear-wheel-drive Model 3 received a three-year 2% APR financing deal.
Tesla’s new Cybertruck has faced quality issues, leading to four recalls in the U.S. within a year.
Later this month, Tesla’s financial status will be clearer with the earnings report. Analysts predict a 2.9% revenue decline to $24.2 billion following a 9% drop in Q1.
Elon Musk’s net worth increased by about $15 billion in two days. Musk recently stated that once Tesla resolves full self-driving and mass-produces Optimus robots, short sellers will face elimination, even mentioning Bill Gates.
Optimus, a humanoid robot, is expected to make Tesla a multi-trillion-dollar company, although its current market cap is below $800 billion.
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