Hedge funds betting against Tesla (TSLA, Financial) have faced significant losses, amounting to at least $5.2 billion, following the U.S. election. The surge in Tesla's stock price, which has risen nearly 30%, adds over $200 billion to its market value, forcing many funds to exit their short positions. The percentage of hedge funds shorting Tesla has decreased from 17% in July to 7% recently.
The shift in the hedge fund landscape coincides with Tesla CEO Elon Musk's public support for Donald Trump. Musk's alignment with Trump has enhanced his political influence and wealth, establishing him as a significant supporter for Trump's future electoral endeavors.
Despite challenges facing the broader electric vehicle industry, including trade tensions and weak consumer demand, Tesla remains resilient with a 30% stock increase this year. This contrasts sharply with the overall industry decline, as reflected by a 12% drop in the KraneShares Electric Vehicles and Future Mobility Index ETF this year.
While other green energy stocks suffered after Trump's victory, Tesla has outperformed them significantly. Concerns about Trump's potential rollback of clean energy incentives have driven investors away from renewable energy stocks, resulting in declines across wind and solar sectors.
