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By Claudia Assis

It's been an 'unprofitable trade' for Tesla shorts so far, analyst says.

$Tesla(TSLA.US)$ stock took a breather on Wednesday, snapping a 13-day winning streak, but it has more than doubled so far this year, creating a multibillion-dollar headache for those betting that the shares would fall.

There has been an increase in Tesla short selling for all of 2023, but "we've recently seen short covering as its stock price has been rallying," said Ihor Dusaniwsky, a managing director at financial analytics firm S3 Partners. "This has been a very unprofitable trade for Tesla short sellers."

Tesla shares on Tuesday ended at their highest since late September after gaining for 13 straight sessions.

Real-time short-interest data from S3 Partners shows that Tesla shorts were down about $816 million in mark-to-market losses based on Tuesday's 3.5% jump for the stock.

Shorts have lost $12.68 billion in year-to-date mark-to-market losses, down 80%; they are down $5.05 billion, or 24%, so far in June. They had $15.85 billion in mark-to-market profits in 2022.

"With [Tesla's] stock price continuing its recent upward trend we should see continued short covering as the [Tesla] short squeeze tightens its hold on short sellers, especially those with less conviction,"  Dusaniwsky said.

After a difficult April, when it fell 20%, Tesla stock was on a tear in May, and has kept that up in June, gaining about 60% in the period. For the year, the stock has gained 110%, which compares with an advance of about 14% for the S&P 500 index.

The most recent gains for the stock came as Tesla saw its fast-charging standard becoming the de facto standard in the U.S.

Last week, Tesla and General Motors Co. announced that GM EV owners would have access to Tesla's "Supercharger" network, usually located near major highways.

GM also said that its future EVs would conform to the Tesla-developed North America Charging Standard, or NACS, by 2025, and before that the automaker would offer an adapter. That follows a similar move by Ford Motor Co. last month

Tesla CEO Elon Musk said back in July 2021 that he would open Tesla's Supercharger to other EVs, although he promised that would happen by the end of 2021.

Tesla created its own connector because there were no standards when it became the only maker of long-range EVs, Musk said then.

Other EVs began to be allowed to charge at Tesla's fast-charging stations last year, but the GM (GM) and Ford (F) announcements brought the matter to the forefront.

GM, Ford and other automakers currently use the Combined Charging System, or CCS, as their charging connection, which is standard in most EVs in Europe and other regions. Tesla has made NACS open source, which means more products that use it are hitting the market.

- Claudia Assis

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