Elon Musk claims that Tesla (TSLA) shorts, people betting against the company’s stock, are going to be ‘obliterated, ‘ but there’s a big if to his prediction.
‘Shorts’ is a term used to refer to people betting against the stock of a company. They have long played a significant role in Tesla’s history on the stock market, and CEO Elon Musk has frequently commented on the situation, going so far as to predict their downfall and criticize them at every opportunity.
Throughout the years, Tesla was often topping the list of the most shorted stocks on the NASDAQ. As the automaker became profitable, shorts started to take losses and lose interest.
However, people who shorted Tesla made a lot of money earlier this year after shorting the stock following a rally over Trump’s election and Musk’s relationship with Trump.
Tesla’s stock has since recovered, and now, the short position on Tesla has stabilized at around 2.6% of the float, which is historically fairly regular and far from previous highs.
Nonetheless, CEO Elon Musk decided to take a jab at them today by claiming that they will be “obliterated” if they don’t sell their positions “before Tesla reaches autonomy at scale”:
“If they don’t exit their short position before Tesla reaches autonomy at scale, they will be obliterated.”
The operating phrase here is clearly: “before Tesla reaches autonomy at scale.”
Musk has been promising that Tesla will reach autonomy at scale by the end of every year for the last 6 years, and it has never happened.
The CEO’s latest timeline is that “autonomy will start positively contributing to Tesla around the second half of 2026.”
In the meantime, Tesla’s “Robotaxi” in Austin is still supervised by a Tesla employee in each vehicle, “Robotaxi” in California is just a ride-hailing service with employees in the driver’s seat, and Tesla’s “Full Self-Driving Supervised” in consumer cars has barely improved since Tesla launched v13 last year.
Electrek’s Take
I think Tesla shareholders hoping for a short squeeze should manage their expectations. With only 2.6% of the float and about a day to cover, any short squeeze would have a minimal impact.
However, I think Elon is probably right. If Tesla reaches autonomy at scale on his timeline, Tesla’s stock would shoot up, but there are huge caveats to this prediction.
Firstly, if you believe Elon’s latest timeline for the second half of next year, there are several significant events that are expected to occur at Tesla before then.
With the tax credit set to expire in the US and increasing competition in Europe and China, Tesla is expected to face several tough quarters after Q3. Elon himself admitted it during the last earnings call.
We are not just talking about Tesla continuing its earnings decline, which has been a clear trend for two years now, but we are talking about Tesla likely losing money, starting in Q1 2026. I don’t think shareholders and the market are ready for that.
Tesla’s liability regarding its failed autonomy promises and crashes is also increasing with more lawsuits advancing through the legal process every week.
In short, Tesla’s stock could take a significant hit over the next 12 months due to its declining EV business and increased liabilities.
Secondly, that’s assuming Elon’s latest autonomy prediction comes true, which has historically been a bad bet.
So Tesla’s fundamentals are about to crash, based on Elon’s own comment, but shorts will get “obliterated” if Elon’s historically terrible autonomy prediction finally comes true. Sounds like a big if to me.
That said, I wouldn’t necessarily recommend shorting Tesla’s stock based on this. The stock is clearly manipulated and trades primarily based on Elon Musk’s lies.
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