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Short Selling Tesla

Read our quick guide on how to short sell the Tesla stock.

Short selling Tesla means selling the Tesla stock without owning it.

The intention behind short selling the Tesla stock is of course to make a profit from a Tesla stock price reveal.

In this short guide, you can read how to short sell the Tesla stock and, or other stocks without the use of complicated and expensive trading tools.

How to Short Sell Tesla

Skilling is a Nordic fin-tech broker with very low costs.

You can read more about why we recommend the Scandinavian fin-tech broker Skilling in this comprehensive Skilling review.

As soon as your account is registered with Skilling, all you have to do in order to short sell Tesla is the following;

Step 1: Make a deposit to your Skilling account (minimum EUR/USD/GBP100)

The most common way of funding is by credit/debit cards and/or bank transfers.

Step 2: Select Tesla in the platform and sell short (‘Press Sell’)

Tesla is by far the most valuable automaker in the world with a market capitalization of about USD 1,2 trillion.

Background Tesla Stock

Tesla is named after Nikola Tesla and has a market value of approximately USD 1,2 trillion at the time of writing (December 2021).

This corresponds to approx. 75% of the value of all of the major car companies in the world combined…

By comparison, the shares of Toyota have a market value of about USD 210 billion.
Volkswagen has a market capitalization of approximately USD 97 billion.

Daimler (Mercedes) has a market capitalization of approximately USD 73 billion.

On January 25, 2021, almost 1 year ago, Tesla had a market value equal to the combined value of Toyota, Volkswagen, Daimler (Mercedes), General Motors, BMW, Ferrari, Hyundai, Honda, Ford, Fiat Chrysler, Suzuki, Nissan, Subaru, and Renault.

And since then, the market value of Tesla has just continued to rise sharply making Tesla CEO Elon Musk the richest man in the world.

This combined with the fact that Tesla does not make any significant profits are far behind in terms of produced cars and with respect to experienced build quality Tesla is also not ranking as high as one would have expected makes more and more investors question the enormous market capitalization of Tesla.

Hence, short selling Tesla stock is for many looking more and more tempting by the day

No doubt, the technology (and especially the software) in Tesla is cutting edge and groundbreaking in many ways, however, in terms of quality the automaker has a long way to go before it is anywhere close to comparable European automakers.

For many years, Tesla has completely dominated the market for (large) electric cars. Competitors’ electric cars have mainly consisted of typical ‘small city cars, while Tesla has somehow owned the market for electric family cars.

Is this now about to be reversed?

While Tesla has been allowed to keep its First mover advantage intact for a surprisingly long period, the latest figures might shed some light on this trend that may be about to end.

Norway, having dominated the position as the world-leading country with respect to the electrification of the nation’s car fleet for some time now is experiencing a somewhat sudden shift in Tesla sales…

The number of electric new vehicle registrations in Norway for January 2021 was 4117 (counting only new cars, -the total number of electric car registrations was 6332).

Of these 4,117, Tesla made up only 75 (56 of the Model 3, and 19 of the Model X).

Having completely dominated this market since the Model S arrived in 2012, Tesla is now experiencing very sharp competition from most of the world’s very well-established high-end car manufacturers.

If this trend continues, and if it is internationally transferable, Tesla can expect a very different share of this market in the years to come.

Then it may be understandable that we are increasingly meeting customers who want to short-sell Tesla…

Having said that, Tesla is globally still selling everything they are able to manufacture.

Tesla buys Bitcoin for USD 1,5 billion

On February 9th, 2020, Tesla informed the market that the car company had bought the cryptocurrency Bitcoin for approximately USD 1,4 billion and that Tesla was looking into opportunities of offering cars to be bought with Bitcoin in the immediate future.

This news story quickly led Bitcoin’s price to its (then) all-time highest at just over USD 63,000 (Bitcoin’s price has since then seen a new all-time high of USD 69,000).

Tesla’s press release wasn’t entirely logical the way we see it…

Why is Tesla buying Bitcoin now? Is it to have change lying around for when they are to start accepting Bitcoin as payment for cars…?

It is very possible that Tesla can be both brave and innovative enough to explore this option, of course given that Bitcoin’s price somewhat stabilizes significantly.

But in this case, we have more faith that this was a very well-staged cover-up;

What many market participants failed to notice during Tesla’s Bitcoin press release was in fact another press release from China…

Tesla had recently received a great deal of criticism in China for a number of factors regarding defects and problems with their cars.

This culminated in that on Monday the 8th of February Tesla was called upon by the Chinese authorities.

Five Chinese regulators summoned Tesla over quality and safety issues of Tesla model 3 in the Tesla Shanghai factory.

The next day, on Tuesday the 9th of February Tesla published the following press release published at 0700 (US East Coast time);

We will reflect deeply over the shortcomings and strengthen our own quality control. We will comply strictly with Chinese laws and regulations and always respect consumer rights.

We will contribute to the healthy development of China’s new electric car market,” Tesla wrote in a statement posted on social media in China.’

The statement was concluded with a thank you…

Twenty-seven minutes later, a new press release from Tesla regarding the purchase of Bitcoin for 1.5 billion was published.

This caused the bad news from China, which is Tesla’s largest market, to ‘drown’ completely.

We could easily see this news alone had it not been so thoroughly and masterfully camouflaged having sent Tesla’s share price at least 5+ % down, and at the same time resulted in significant further negative press coverage.

In this context, it is easy to see the incentives Tesla had to shut this down with the purchase of Bitcoin…

With Tesla’s then approximate USD 1,000 billion market capitalization, a 5% decline for the Tesla stock would have equated to a drop in value of around USD 60 billion.

1.5 billion spent in ‘Bitcoin camouflage’ seems like a strategic move for the history books

Elon Musk later spoke negatively about Bitcoin, -and Bitcoin’s vast energy consumption, as well as moving away from previous statements about accepting Bitcoin as accepted payment upon buying Tesla’s electric cars.

Short sell Tesla using CFDs

The easiest way to short sell the Tesla stock is to use CFDs. CFDs allow you to leverage your short selling by 5 times.

In other words, to take a short position in Tesla equivalent to 10 Tesla shares (USD 845*10 = 8450 Dollars), you will only have to have a margin of less than USD 2,000.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 76 - 80% of retail investor accounts lose money when trading CFDs with these providers. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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