Recently, investor Alexandra Merz shared on X a list of institutions still shorting Tesla stock. The top three, namely Mitsubishi UFJ Securities, Jane Street Capital, and Citadel, have held their positions since Q1 2025. Notably, Banque Pictet reduced its short exposure, dropping from third to twenty-first. The post caught Musk’s eye, prompting him to respond, “If they don’t exit their short position before Tesla reaches autonomy at scale, they will be obliterated”. Similar warnings from Musk in the past were brushed off, but this time, short-sellers may want to listen.
Previously, Tesla’s stock did suffer a significant decline, driven by two key factors. The first is Elon Musk’s political engagement, including his vocal support for Donald Trump, which alienated segments of Tesla’s progressive customer base, particularly in Europe. Then, there is also the intensifying competition in the EV market, led by Chinese automakers like BYD, which released cheaper, better-designed models as Tesla’s own lineup began to age.
Today, however, the landscape has shifted dramatically. In early August, Musk revealed that Tesla is training a new full self-driving (FSD) model with ten times more parameters than the current version, aiming for public release by late September. His post emphasized Tesla is “one step closer to large-scale unsupervised FSD”, a milestone that could redefine not just Tesla’s product, but its identity.
Short-sellers are betting Tesla will fail to scale FSD, remaining a traditional carmaker under pressure from global competition. Musk, meanwhile, has doubled down on technology, pulling back from political activism to refocus on innovation. By all accounts, he has resumed his relentless work ethic, personally overseeing Tesla’s FSD development, SpaceX’s Starship missions, and the rollout of his AI startup’s next-gen model.
In June, Tesla completed its first fully autonomous vehicle delivery: a Model Y traveled from the factory to a customer’s home, over highways and city streets, without a driver or remote input. It even arrived ahead of schedule. This real-world demonstration marked a turning point, proving FSD’s commercial viability.
Musk’s political recalibration has also played a strategic role. Once an advocate for reshaping government alongside Trump, he formed the short-lived “America Party” and took aim at the two-party system. Yet now Musk has stepped away from political confrontation and re-aligned with the Republican establishment. He has and softened his stance on Trump. Trump, for his part, dismissed rumors of revoking federal subsidies for Musk’s companies and voiced public support. Musk’s other political ally, Vice President J.D. Vance, has expressed even greater enthusiasm. Vance strongly encourages Musk’s return to the Republican fold.
As the world shall witness, Tesla will no longer be just a car company; it will be an AI robotics company, a software technology company. The car itself will be a “new energy intelligent vehicle”, a robot on four wheels.
Tesla’s FSD system is now the most advanced on the market, with a high percentage of deployment in the U.S. The implications are profound: Tesla’s vehicles will cease to be products in the traditional sense. Instead, they will become AI-enabled revenue-generating platforms. The core value will shift from hardware to software, FSD as the operating system, much like Microsoft Windows. This opens the door for Tesla to license FSD to other automakers, fundamentally altering its business model.
Tesla is on the verge of a transformation that will redefine its valuation, business model, and global role. The age of “new energy intelligent devices” is no longer theoretical; it is arriving, and Tesla is leading the charge.
