Tesla's recent stock surge has caused an estimated $5.7 billion in unrealized losses for short-sellers. As the stock price continues its upward trajectory, the potential for further increases looms.

Short-Interest Pressure on TSLA Stock

According to market data tracker Ortex, Tesla stock has experienced a new level of short-interest pressure. It reached 3.84% the previous week, a level not seen since 2021. This was just before TSLA stock surged to an all-time high and recorded its most successful year in 2022.

The short-interest level has since subsided slightly to 3.80%, translating to approximately 105.3 million shares shorted, with an average cover time of 0.68 days. Due to this short period, short-sellers are particularly vulnerable to further price increases.

Strong Vehicle Deliveries

On July 2, Tesla reported second-quarter deliveries of 443,956 vehicles, surpassing Wall Street estimates of 439,000. While deliveries fell 4.8% from a year earlier, this decline was less steep than the 8.5% year-over-year drop in the first quarter.

This suggests that demand for Tesla vehicles remains stronger than feared despite an aging lineup and increasing competition.

Strategic Incentives

Tesla has implemented various incentives to boost sales, including discounts, low- or no-interest financing options, and other perks. In the second quarter, Tesla reduced prices in Germany and Norway and offered zero-interest loan promotions in China for its entry-level Model 3 sedan and Model Y SUVs.

In the U.S., buyers of the rear-wheel-drive Model 3 were offered a three-year, 2% APR financing deal. These measures have helped mitigate the decline in sales and maintain consumer interest.

Upcoming Earnings Report

Tesla's upcoming earnings report, due on July 23, is expected to provide a clearer picture of the company's financial health. Analysts predict a 2.9% revenue decline to $24.2 billion following a 9% decline in the first quarter.

This report will be crucial for understanding Tesla's ability to navigate its current challenges and maintain its market position amidst growing competition and an aging product lineup.

"Tesla's financial health and market position will be scrutinized in the upcoming earnings report."

The market is keenly watching how Tesla will continue to evolve and respond to the increasingly competitive landscape. Will the company maintain its edge, or will it face further challenges? Only time will tell.