As Tesla Shares Stumble, Short Sellers Score Big With $11.5 Billion in Gains This Year

Tesla shares have witnessed a sharp downtrend of over 40% this year on the Nasdaq index with protests against the EV-maker and weak delivery numbers weighing down the overall sentiment. Tesla stock has dropped to $238 from more than $420 price level. However, some have made big money despite the fall.

Short sellers have made around $11.5 billion in mark-to-market profits in 2025, as per data by financial analytics firm S3 Partners cited in a CNBC report. On Tuesday, the shares of the EV-maker surged over 4% and were trading around $237 price level ahead of its Q1 earnings announcement.

The street is already expecting a drop in year-on-year (YoY) revenue figures after Tesla announced a 13% drop in vehicle deliveries for the first quarter. Meanwhile, his close association with President Trump and his involvement in DOGE has attracted widespread criticism.

Recently, Wedbush Securities analyst Dan Ives reportedly said that "Musk needs to leave the government, take a step back on DOGE, and get back to being CEO of Tesla full-time.”

“Tesla has unfortunately become a political symbol globally of the Trump Administration/DOGE,” Ives wrote in a market note.

Strong competition from BYD

While internal problems continue to weigh down the overall investor sentiment, strong competition from Chinese EV rival BYD has made the overall outlook worse for Tesla. BYD has already surpassed the US EV-maker in sales figures, becoming the world's top EV seller. While the Chinese EV maker delivered 4.27 million vehicles last year, Tesla's figure was way less. Plus, BYD has witnessed a 30% surge in its share price so far in 2025.

“(For Tesla) It’s turned into a nightmare for Tesla and for investors,” Ives told CNN. “The tariffs, the DOGE controversies, the brand damage — it’s been a perfect storm.” The upcoming quarter earnings would be a major watch for investors as they try to gauge the future outlook of the luxury EV-maker.