Tesla CEO Elon Musk has issued a stern warning to short sellers, stating that significant losses await those who maintain their positions before the company achieves full self-driving capabilities.

Musk's warning came in response to a post by retail investor Alexandra Merz, who shared a list of institutional short sellers betting against the electric vehicle manufacturer.

The list includes prominent financial institutions such as MUFG Securities EMEA, Jane Street Group, UK-based Clean Energy Transition LLP, and US hedge fund Citadel Advisors.

According to Merz, some Tesla shorts like Banque Pictet have recently been reducing their bearish positions.

In his response, Musk declared that Tesla short sellers are 'running out of time.' He emphasized that short positions should be closed before Tesla achieves mass-market autonomous driving, or investors risk being 'wiped out'.

A History of Tension

Short sellers have long played a significant role in Tesla's stock market journey, and Musk's criticism of them is nothing new.

The key phrase in Musk's latest warning is clearly: 'before Tesla achieves mass-market autonomous driving.' However, significant uncertainty remains about when Tesla might actually reach this milestone.

Over the past several years, Musk has repeatedly provided timelines for achieving full self-driving capabilities, none of which have materialized as promised. His most recent projection suggests 'autonomous driving will begin making positive contributions to Tesla around the second half of 2026.'

Recent Developments in Autonomous Driving

In June, Tesla officially launched its Robotaxi service in Austin, Texas (utilizing FSD technology), though with safety drivers equipped with emergency stop buttons for necessary interventions.

Last month, the company expanded the Robotaxi service to California's Bay Area, though in the Golden State it operates merely as a ride-hailing service with Tesla employees in the driver's seat.

Musk recently announced that the long-awaited FSD V14 update will launch in approximately six weeks, promising significant performance improvements including a 10x parameter increase and multiple important upgrades.

Stock Performance Challenges

This year, Tesla's stock has underperformed significantly, down over 11% year-to-date — making it the worst performer among the so-called 'Magnificent Seven' tech stocks. This underperformance stems from multiple challenges including investor concerns over Musk's political engagements, his fractured relationship with former President Trump, and declining sales across several global markets.

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