A long time ago, ANBOUND reached a unique conclusion when evaluating the prospects of new energy vehicles: these vehicles should more accurately be called “new energy intelligent devices” and categorized as high-tech electronic products. Most people disagreed with this assessment in the past, and they may still disagree now, yet Elon Musk shares the same thought. He leveraged this very concept to orchestrate a dramatic transformation of Tesla. Once a company facing intense competition and a plummeting stock price, Tesla reinvented itself as an AI company, once again capturing the attention of investors worldwide.
Recently, investor Alexendra Merz shared a list of institutions continuing to short Tesla stock on the X platform. The top three short-sellers are Mitsubishi UFJ Securities, Jane Street Capital, and Citadel. Merz noted that Mitsubishi UFJ Securities is based in London and is part of Japan’s Mitsubishi UFJ Financial Group, with no relation to Mitsubishi Motors. She also explained that the rest of the institutions on the list have remained largely unchanged since Q1 2025, except for Swiss private bank Pictet, which has significantly reduced its short positions, dropping from No. 3 to No. 21 on the list. The post caught Elon Musk’s attention, and he responded by posting on X, stating that, “If they don’t exit their short position before Tesla reaches autonomy at scale, they will be obliterated”. In fact, Musk has made similar remarks in the past. But this time, those short-sellers might actually want to take his warning seriously.
In the past, Tesla’s stock price did experience a sharp and sustained decline due to short selling. A large amount of capital pulled out of Tesla, causing its share price to drop from a peak of over USD 410, losing about a quarter of its value. This decline was mainly driven by two factors: First, Elon Musk’s public image and political stance sparked controversy, especially his outspoken support for certain political issues, such as backing Donald Trump and his policies. This led to a decline in brand loyalty among some investors and consumers, particularly among Tesla’s progressive customer base in Europe. Short sellers believed these actions could damage the brand’s value and sales potential, especially in a highly competitive market. Second, the electric vehicle market became increasingly competitive. Chinese automaker BYD and others introduced models that were cheaper, better-performing, and even more visually appealing. Short sellers argued that with Tesla’s aging product lineup and intensifying competition, the company was struggling to maintain its dominant position in the market.
The situation now is very different. In early August, Musk confidently revealed that Tesla is training a brand-new full self-driving (FSD) model with roughly ten times the number of parameters compared to the current version. If all goes well, the model could even be ready for public release by the end of September. The key lies in the words Musk used in his reply on X: “One step closer to large-scale unsupervised FSD”. This is, in fact, the core of a century-defining bet. The short-sellers are betting that Musk will ultimately fail to deliver on FSD, and that Tesla will remain an ordinary car company facing fierce competition from BYD and others, which would cap its valuation. The twist is that Musk, having stepped back from political pursuits, is now all-in on a different gamble, that Tesla’s FSD will succeed, and large-scale autonomous driving will definitely become a reality.
Once Musk achieves this, it becomes clear, especially if one actually drives a Tesla today, that FSD is no longer a question of whether it can be done, but simply a matter of how well it can be optimized. When the curtain is fully lifted, what Tesla sells as a car will no longer be the point. Indeed, it will not even matter who manufactures Tesla’s vehicles. What truly matters is the AI software, the FSD. At that point, Tesla will no longer be just a car company; it will be an AI robotics company, a software technology company. The car itself will just be what ANBOUND once described as a “new energy intelligent vehicle”, a robot on four wheels. Tesla could even open up its FSD to the world, allowing everyone to use it, just like people everywhere use Microsoft Windows. And if that happens, Tesla’s stock could soar past the USD 500 mark, just like Microsoft’s, and short-sellers would be completely wiped out. According to a senior researcher at ANBOUND, Tesla’s FSD is now not only the most mature system on the market but also has an increasingly high chance of real-world deployment in the U.S., with that probability now estimated at around 90%.
The projection is based on our long-term research and tracking of Musk’s trajectory: Musk has fundamentally shifted course.
At one point, Musk was deeply involved in politics, driven by an ambition to build a “super government” in the U.S. alongside Donald Trump. He aggressively sought to restructure the federal government by applying corporate principles, particularly cost-cutting and efficiency improvements to public administration. This political move made him a target of intense criticism from left-leaning figures and mainstream media outlets, who viewed him as disruptive and antagonistic. Even after falling out with Trump, Musk went so far as to establish the "America Party", promising to “liberate” the American public from the entrenched two-party system dominated by Democrats and Republicans. However, based on ANBOUND’s continuous analysis, Musk has clearly abandoned this path of political confrontation and has refocused on his core identity as a technology visionary. He has returned to the relentless work ethic that once defined him, reportedly sleeping in offices, server rooms, or on factory floors. Musk has publicly stated that he is now personally overseeing several critical initiatives: the deployment of products from his AI startup's next-generation large language model, the rollout of Tesla’s new-generation FSD system, and SpaceX’s upcoming Starship launch missions.
Musk’s political shift is also evident in his renewed financial support for the Republican Party and a clear move away from confrontation with the Trump camp. Reports indicate that Musk has resumed political donations to the GOP, contributing approximately USD 20 million. As for his personal relationship with Trump, Musk’s stance has visibly softened. He has deleted several posts critical of Trump, and according to close associates, his previous frustration has begun to subside. It is believed that Musk may now be open to repairing the relationship. Trump has, in turn, welcomed this shift. According to Business Insider, Trump addressed rumors suggesting he planned to revoke substantial government subsidies received by Musk’s companies, potentially damaging his business empire. Trump dismissed these claims, stating that he wishes success for Musk and for all American enterprises. With this public statement, it became clear that any prior tensions between the two have been set aside. Musk’s other political ally, Vice President J.D. Vance, has expressed even greater enthusiasm. Vance strongly encourages Musk’s return to the Republican fold. In truth, few within the GOP are willing to oppose Musk, since doing so would be tantamount to turning away from capital and innovation. As a result, Musk has effectively cleared a political path for the deployment of Tesla’s FSD technology. The political barriers that once hindered progress are now being systematically removed.
Tracking of Musk’s recent moves also reveals that, beyond his political realignment, he has undertaken a strategic repositioning of Tesla’s future. The company is no longer confined to competing in new energy vehicle manufacturing or price wars.. Instead, it is now making a bold shift towards AI. In June of this year, Musk announced on X that Tesla had completed its first fully autonomous vehicle delivery, from the factory directly to the customer’s doorstep. This Model Y completed an intercity journey, including both highways and urban roads, entirely without a driver or remote intervention, and even arrived a day ahead of schedule. This milestone marks a critical breakthrough in AI-powered technology: for the first time, Tesla’s Full FSD system demonstrated its real-world capabilities through a commercial delivery. The self-driving delivery not only showcased a significant leap in the maturity of Tesla’s FSD technology but also became one of Musk’s key sources of confidence in his battle against short-sellers in the financial markets.
Based on all available information, Tesla under Musk is undoubtedly on the threshold of a full transformation into an AI company. Each Tesla vehicle is becoming an “AI-powered intelligent device” capable of generating revenue through continuous software upgrades. At that point, Tesla’s valuation model will be completely redefined, not only unlocking significant upside potential for its stock price but also ushering in a new era for the company. A new dawn for Tesla is on the horizon.
Final analysis conclusion:
While the rest of the world is busy trying to replicate Tesla’s approach to manufacturing new energy vehicles, Tesla itself has already evolved into a company focused on AI-powered intelligent vehicles. Its autonomous driving system is not only the most advanced on the market, but also increasingly likely to see real-world deployment in the U.S., with current estimates placing that probability at around 90%. This signals that Tesla is well on its way to becoming a true AI company.
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Zhijiang Zhao is a Research Fellow for Geopolitical Strategy programme at ANBOUND, an independent think tank.
