Tesla's Slump Has Been A Goldmine For Short Sellers This Year—They've Made $11.5 Billion, Beating Out Nvidia's $9.4 Billion

It's been a tough year for Tesla TSLA shareholders, but short sellers are cashing in big time.

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Short Sellers Score Big

Tesla’s stock has dropped 44% so far in 2025, wiping out hundreds of billions of dollars in market value and resulting in $11.5 billion in mark-to-market profits for investors betting against the company, according to S3 Partners and reported by CNBC. That haul beats the $9.4 billion short sellers made from Nvidia, making Tesla the most lucrative short this year.

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Tesla’s Rough Earnings Report

Tesla's first-quarter earnings report released on April 22 confirmed what many were expecting. Revenue fell 9%, auto revenue dropped 20%, and net income plunged 71% compared to a year ago. Tesla also delivered 50,000 fewer vehicles in the first three months of 2025, marking its worst sales quarter in nearly three years.

Musk Scales Back His Government Role

Much of the blame has been pinned on Elon Musk's high-profile role in President Donald Trump's administration. Musk has been leading the Department of Government Efficiency, a position that drew protests, showroom vandalism, and boycotts, especially in Europe, where he's supported far-right political parties.

Facing mounting pressure, Musk announced during the earnings call that he's scaling back his government duties starting in May. “Starting next month, May, my time allocation to DOGE will drop significantly,” he said.

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Still, Musk defended his controversial side project, saying it was important to cut back on “waste and fraud” in the government. “I think the right thing to do is fight the waste and fraud and try to get the country back on the right track,” Musk said. “If the ship of America goes down, Tesla will go with it.”

Trade War and Tesla’s Future

Meanwhile, Tesla warned that the ongoing trade war is creating more uncertainty for the company's future. Trump's tariffs on auto imports and parts are expected to result in higher costs for Tesla, even though it manufactures its cars in the U.S. Musk made it clear that he opposes higher tariffs, saying, “I’ve been on the record many times saying lower tariffs are a good idea for prosperity.”

Despite the rough quarter, Musk remains optimistic. He said, “The future of Tesla is brighter than ever,” and promised that upcoming projects like affordable EV models and robotaxis would usher in a “happy future.”

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Tesla Faces Growing Competition

Tesla's stock, which nearly doubled between election day and mid-December, has now fallen sharply from its highs, giving up all of its post-election gains. Even though Tesla plans to roll out new models and driverless ride-hailing services later this year, it faces increasing pressure from Chinese competitors like BYD, which has been ahead of Tesla in EV sales in recent quarters.

Short sellers aren't slowing down either. Nvidia NVDA, Apple AAPL, and Tesla remain among the most-shorted stocks by value, with Nvidia at $24.6 billion, Apple at $22.2 billion, and Tesla at $17.6 billion, according to S3.

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