Tesla's Q2 new car delivery report released this week was better than expected, which is bad news for its short interest.
According to S3 Partners data, the stock rose about 17% in the two trading days since the Q2 delivery report was released, causing Tesla short sellers to lose about $3.5 billion at market prices. Over a longer period of time, Tesla's stock price has skyrocketed more than 70% since hitting bottom in April of this year, making it a painful few months for short sellers.
Currently, Tesla's short interest accounts for 3.5% of the outstanding shares, with a short position of 97 million shares and a nominal value of $22.4 billion.
At the end of April, Tesla was among the worst-performing large tech giants, with a year-to-date decline of 44%. Currently, it is just about $2 away from regaining all of its year-to-date losses.
According to the delivery data released by Tesla on Tuesday, the company delivered a total of 0.444 million new cars in Q2, a year-on-year decrease of 4.8%, which is less than the 8.5% decrease in Q1. Although it marks the second consecutive quarter of year-on-year declines, it is better than the market's expected 0.4393 million cars. The total volume for the quarter was 0.411 million cars. Tesla's sales in both China and the US exceeded expectations. In addition, Tesla has maintained its position as the top-selling electric vehicle globally.
As is well known, Tesla's auto business has been struggling with declining sales. Due to aging product lines and fiercer competition than ever before, Tesla has been using discounts, low- or zero-interest financing, as well as other incentives to encourage people to buy its electric cars for several months. At the same time, Tesla's latest model Cybertruck is slow to get going, and quality issues have led to four voluntary recalls in less than a year in the US.
Although Tesla's latest delivery report indicates that demand for its cars is still stronger than expected, the information it provides on the company's performance is limited. Tesla's financial situation will be more clearly displayed in the financial report it will release later this month. Analysts expect Tesla's revenue to fall 2.9% to $24.2 billion, after a 9% drop in Q1.
This week, Tesla's solar and energy storage business also made new breakthroughs in Q2, with new battery storage capacity reaching a quarterly record high. Tesla Energy, a subsidiary of Tesla, reported that it deployed 9.4 GWh of battery storage products in Q2 of this year, a quarterly record high. It grew by 129% quarter-on-quarter and 157% year-on-year, a remarkable increase in speed.
Morgan Stanley believes that, compared to delivery volume, Tesla's energy storage business is the brighter spot and its "AI bottom line." Tesla holds the critical ace of solar and energy storage that will be the key "winning hand" for the next round of AI investment. The electricity demand brought on by the AI boom will make Tesla a key player in the US energy market.
In addition, Tesla's second-generation humanoid robot Optimus made its Shanghai debut this week, which also fueled the market's enthusiasm. Musk said at last month's shareholder meeting that he believes Optimus will bring huge profits to the company. He said that Tesla has the ability to produce approximately 0.1 billion Optimus robots per year. If Tesla has a 10% market share and each robot sells for $0.02 million, Tesla can make $1 trillion in profits per year when it mass produces them.
Tesla CEO Musk's net worth has increased by about $15 billion in the past two days. This week, when responding to opinions that are bearish on Tesla on the X platform, he said:
Once Tesla completely solves the problem of autonomous driving and mass-produces Optimus robots, anyone who still holds a short position will be eliminated, even Bill Gates.