Here’s What Shorts Think About Tesla Inc (TSLA) and Why They’re Wrong

Another argument, why big car makers don’t really care about Electric Vehicles is that they asked the EPA (led by climate change denier Scott Pruitt) to withdraw a decision made by the Obama administration to lock in vehicle emission rules through 2025. The Alliance of Automobile Manufacturers, which includes General Motors Company (NYSE:GM), Toyota, Volkswagen, Mercedes, Fiat Chrysler Automobiles NV (NYSE:FCAU), Ford Motor Company (NYSE:F), and several other manufacturers, said that the standard to achieve 54.5 miles per gallon by 2025 is too high and will result in higher costs and higher price tags for vehicles. So, if car makers were so committed to making electric vehicles, why would they feel threatened by higher fuel efficiency standards?

And let’s not forget the fact that Tesla Inc (NASDAQ:TSLA) has disrupted the car market and it’s not only selling a car, but a lifestyle. In this case, Tesla can indeed be compared to Apple Inc. (NASDAQ:AAPL). A couple of years ago, there were many discussions that Apple might struggle because its competitors had caught up and that the company’s sales would slump, since many companies (like Xiaomi, Huawei, etc.) have started to make really good smartphones with quality and specifications up to par with iPhones. Yet, Apple is doing pretty good. Granted, the circumstances are different, since Apple Inc. (NASDAQ:AAPL) has way more money than its competitors. However, if Tesla will be able to start mass producing its vehicles, continue to build its infrastructure and enter in the shared car market before other competitors, it’s likely to succeed. There might be many “ifs”, but like all Tesla bulls I believe that Elon Musk is the guy to pull it off.

In conclusion, Tesla bulls will likely be disappointed in the medium-run, as they are overestimating the company and ignoring some issues that might come along the way. In the long run, they will score big, as Tesla Inc (NASDAQ:TSLA) not only will become a leading EV maker, but will also become one of the biggest residential solar panel (solar roof) companies. On the other hand, Tesla bears will also be disappointed, especially the big skeptics that want to see the company fail. They will make some profits along the way from their short bets, but they will close their positions at the first opportunity and then will say that they decided to cover the shorts, even though they still believe that the company is doomed and all bulls are still idiots. Of course, there’s no guarantee that either scenario will happen.

Disclosure: None