Tesla's short interest has fallen to a record low 1.6%, reflecting a steady unwind in bearish bets as investors back its AI and autonomy pivot.
- The company is doubling down on autonomy, with Cybercab production set for next month and ongoing driverless testing in Texas.
- Gary Black warned Nvidia’s expanding partnerships with global automakers could challenge Tesla’s autonomy lead, as more players race toward self-driving.
- Tesla’s energy business and $4.3 billion LG battery deal are supporting the bullish case, even as EV competition from BYD and weak demand persist.
Tesla Inc.’s (TSLA) short interest has declined to a record low as investors back its autonomy and AI pivot, even as Nvidia’s growing partnerships with global automakers signal that the race toward self-driving may not be Tesla’s alone.
TSLA stock posted its second straight session of gains on Tuesday, rising nearly 1% to $399.27.
Bear Bets Fade As Tesla Doubles Down On AI
Short interest in Tesla has fallen to a record low 1.6%, down from 1.7% last week and 2.2% at the start of 2026, reflecting a steady unwind in bearish bets over the past three months.
The shift aligns with growing investor focus on Tesla’s pivot beyond EVs toward AI, robotics and energy. In January, the company outlined plans to spend over $20 billion in 2026 to scale investments across vehicles, batteries and robotics, while phasing out its Model S and Model X to prioritize newer programs like Optimus.
Tesla has also deepened ties to Elon Musk’s AI ecosystem, committing $2 billion to xAI, later converted into a stake in SpaceX following the merger, linking it more closely to Musk’s broader AI ambitions ahead of a potential IPO.
Tesla Bets Big On Cybercab Robotaxis
At the core of Tesla’s strategy is its robotaxi push, led by the Cybercab, a pedal and steering-free vehicle for autonomous ride-hailing. Musk said that Cybercab production is set to begin in April, describing it as a “radical redesign” of manufacturing aimed at achieving five-times higher output over time. He cautioned that early production will follow a slow S-curve, given that “almost everything is new,” but said the system could eventually scale to produce a vehicle roughly every 10 seconds.
Tesla has already rolled its first Cybercab off the production line at its Texas gigafactory and has been testing the production system ahead of volume ramp-up.
The EV firm has also begun robotaxi operations in Austin using Model Y vehicles and is now testing fully driverless rides in Texas. Its Full Self-Driving system has logged over 8.4 billion miles of assisted driving.
However, rivals are further ahead in deployment. Alphabet’s Waymo has logged over 200 million driverless miles, while Baidu, WeRide and Pony.ai continue expanding robotaxi fleets. Some investors, including ARK Invest still see Tesla’s edge in manufacturing scale, which could drive faster fleet expansion and lower costs over time.
Tesla Leans On Energy Amid EV Pressure
Alongside autonomy, Tesla’s energy business is strengthening investor confidence. LG Energy Solution will supply $4.3 billion worth of battery cells from Michigan for Tesla’s Megapack systems, supporting efforts to localize supply chains after tariffs hit the segment by about $200 million in late 2025.
At the same time, Tesla’s core EV business remains under pressure. The company has lost its top EV-seller position to BYD as competition intensifies. In China, deliveries rebounded to 58,599 units in February, but followed a sharp January decline, with overall demand still weak.
Gary Black Flags Nvidia Autonomy Threat
Even as bearish bets fade, Gary Black flagged on X the risks to Tesla’s autonomy narrative, pointing to Nvidia’s expanding ecosystem.
Citing a CNBC interview, Black highlighted Nvidia CEO Jensen Huang’s platform strategy of partnering with automakers such as Mercedes-Benz, BYD, Hyundai, Geely, Nissan, General Motors and Toyota, rather than building its own cars. He said Tesla’s valuation assumes leadership in unsupervised autonomy, but investors may be underestimating the number of competitors pursuing similar capabilities.
Nvidia is scaling this ecosystem through its Drive Hyperion platform, adding partners including Hyundai, Nissan, Isuzu, BYD and Geely, alongside Uber, Aurora, Nuro, Stellantis, Sony and Lucid. Huang described the phase as a turning point, calling it the “ChatGPT moment of self-driving cars,” as Nvidia positions itself as the underlying technology layer for autonomous vehicles.
How Did Stocktwits Users React?
On Stocktwits, retail sentiment for TSLA shifted to ‘neutral’ from ‘extremely bullish’ over the past month amid over a 400% surge in message volumes over the same period.
TSLA stock has declined 11% so far this year, making it the second-worst performer among the “Magnificent Seven” group of equities.
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