Tesla has the makings of a controversial stock. It’s a company with products that are loved by its users and hated by its skeptics, and it’s led by a man that’s both admired by his supporters and loathed by his critics. It was then no surprise when Tesla became one of the most-shorted companies in the market. But amidst Tesla’s rise last year and the release of its Q1 2021 vehicle production and delivery report, it appears that TSLA bears, or at least a good number of them, are starting to go extinct.
A good overview of how a company is perceived could be found in the overall stance of analysts covering the stock. Among the 41 analysts covering TSLA today, 15 have a “Buy” rating, 14 maintain a “Hold” rating, and 12 have a “Sell” rating, as per data from Bloomberg. This suggests that Tesla remains quite polarizing, as Buy ratings typically outnumber Sell ratings 10-to-1 for stocks in the Dow Jones Industrial Average.
Tesla (TSLA) sets new records with with 184k vehicle deliveries in Q1 2021
The same is true for TSLA’s price targets. Tesla’s bull-bear spread between its highest price target ($1,036) and its lowest ($135) stands at $901, or about 133% of the current $661.75 stock price. In the Dow Jones Industrial Average, the average bull-bear spread for stocks is less than 50%. While Tesla has maintained its polarizing nature in the market, however, there is one metric that suggests that a TSLA bear exodus is taking place.
There was a time not too long ago when Tesla’s short-interest ratio was about 25%, which meant that one in every four shares was borrowed and sold by investors betting on the company to fail. Such a short-interest ratio was insane, as the average for stocks in the S&P 500 is just about 3%. Today, this ratio stands at just about 6%, which is still higher than average but significantly lower than its figures three years ago.
As noted in a Barron’s report, there is an important mitigating factor in Tesla’s short-interest ratio, in the form of hundreds of millions in convertible bonds outstanding, most of which were issued long ago and are capable of being converted into TSLA stock at around $65 per share. Considering that Tesla stock is worth more than 10x that amount today, the convertible bonds have rallied over 500% over the past year.
While this is great for convertible bond holders, numerous bond investors are actually not interested in Tesla stock. Instead, some are convertible arbitrage investors, who buy convertible bonds and short the underlying stock. This way, the arbitrage trader is able to lock in a notable bond yield. S3 Partners managing director of predictive analytics Ihor Dusaniwsky has noted that the bonds are “mostly held by hedge funds.” He also estimates that about half of Tesla’s current short interest might be part of a convertible arbitrage strategy.
If the S3 Partners’ executive’s estimates are accurate, it would suggest that about 22 million Tesla shares are sold short, or about 2.9% of TSLA stock. This number is substantial, but it is small compared to the 200 million TSLA shares sold short back in 2019. This does not mean to say that Tesla bears have entirely given up, of course, as some will likely remain with their short position for a long time to come. However, the declining number of TSLA shares that are sold short does suggest that bears, or at least a good number of them, may be throwing in the towel.
Former Goldman Sachs Asset Management CIO Gary Black has noted that the declining number of TSLA bears may be due to the fact that some critical bearish arguments against Tesla are being soundly debunked. One of these is the notion that Tesla’s share of the EV market will get drastically smaller as soon as other automakers enter the electric car segment. Despite the noise by proponents of this thesis, the opposite has been true, as more and more car buyers tend to leave gas-powered vehicles–not other electric cars like Tesla–when they purchase EVs made by other automakers.
Disclaimer: I am long TSLA
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Elon Musk
What is Digital Optimus? The new Tesla and xAI project explained
At its core, Digital Optimus operates through a dual-process architecture inspired by human cognition.
Tesla and xAI announced their groundbreaking joint project, Digital Optimus, also nicknamed “Macrohard” in a humorous jab at Microsoft, earlier this week.
This software-based AI agent is designed to automate complex office workflows by observing and replicating human interactions with computers. As the first major outcome of Tesla’s $2 billion investment in xAI, it represents a powerful fusion of hardware efficiency and advanced reasoning.
At its core, Digital Optimus operates through a dual-process architecture inspired by human cognition.
Macrohard or Digital Optimus is a joint xAI-Tesla project, coming as part of Tesla’s investment agreement with xAI.
Grok is the master conductor/navigator with deep understanding of the world to direct digital Optimus, which is processing and actioning the past 5 secs of…
— Elon Musk (@elonmusk) March 11, 2026
Tesla’s specialized AI acts as “System 1”—the fast, instinctive executor—processing the past five seconds of real-time computer screen video along with keyboard and mouse actions to perform immediate tasks.
xAI’s Grok model serves as “System 2,” the strategic “master conductor” or navigator, providing high-level reasoning, world understanding, and directional oversight, much like an advanced turn-by-turn navigation system.
When combined, the two can create a powerful AI-based assistant that can complete everything from accounting work to HR tasks.
Will Tesla join the fold? Predicting a triple merger with SpaceX and xAI
The system runs primarily on Tesla’s low-cost AI4 inference chip, minimizing expensive Nvidia resources from xAI for competitive, real-time performance.
Elon Musk described it as “the only real-time smart AI system” capable, in principle, of emulating the functions of entire companies, handling everything from accounting and HR to repetitive digital operations.
Timelines point to swift deployment. Announced just days ago, Musk expects Digital Optimus to be ready for user experience within about six months, targeting rollout around September 2026.
It will integrate into all AI4-equipped Tesla vehicles, enabling parked cars to handle office work during downtime. Millions of dedicated units are also planned for deployment at Supercharger stations, tapping into roughly 7 gigawatts of available power.
Oh and it works in all AI4-equipped cars, so your car can do office work for you when not driving.
We’re also deploying millions of dedicated Digital Optimus units in the field at Superchargers where we have ~7 gigawatts of available power.
— Elon Musk (@elonmusk) March 12, 2026
Digital Optimus directly supports Tesla’s broader autonomy strategy. It leverages the same end-to-end neural networks, computer vision, and real-time decision-making tech that power Full Self-Driving (FSD) software and the physical Optimus humanoid robot.
By repurposing idle vehicle compute and extending AI4 hardware beyond driving, the project scales Tesla’s autonomy ecosystem from roads to digital workspaces.
As a virtual counterpart to physical Optimus, it divides labor: software agents manage screen-based tasks while humanoid robots tackle physical ones, accelerating Tesla’s vision of general-purpose AI for productivity, Robotaxi fleets, and beyond.
In essence, Digital Optimus bridges Tesla’s vehicle and robotics autonomy with enterprise-scale AI, promising massive efficiency gains. No other company currently matches its real-time capabilities on such accessible hardware.
It really could be one of the most crucial developments Tesla and xAI begin to integrate, as it could revolutionize how people work and travel.
News
Tesla adds awesome new driving feature to Model Y
Tesla is rolling out a new “Comfort Braking” feature with Software Update 2026.8. The feature is exclusive to the new Model Y, and is currently unavailable for any other vehicle in the Tesla lineup.
Tesla is adding an awesome new driving feature to Model Y vehicles, effective on Juniper-updated models considered model year 2026 or newer.
Tesla is rolling out a new “Comfort Braking” feature with Software Update 2026.8. The feature is exclusive to the new Model Y, and is currently unavailable for any other vehicle in the Tesla lineup.
Tesla writes in the release notes for the feature:
“Your Tesla now provides a smoother feel as you come to a complete stop during routine braking.”
🚨 Tesla has added a new “Comfort Braking” update with 2026.8
“Your Tesla provides a smoother feel as you come to a complete stop during routine braking.” https://t.co/afqCpBSVeA pic.twitter.com/C6MRmzfzls
— TESLARATI (@Teslarati) March 13, 2026
Interestingly, we’re not too sure what catalyzed Tesla to try to improve braking smoothness, because it hasn’t seemed overly abrupt or rough from my perspective. Although the brake pedal in my Model Y is rarely used due to Regenerative Braking, it seems Tesla wanted to try to make the ride comfort even smoother for owners.
There is always room for improvement, though, and it seems that there is a way to make braking smoother for passengers while the vehicle is coming to a stop.
This is far from the first time Tesla has attempted to improve its ride comfort through Over-the-Air updates, as it has rolled out updates to improve regenerative braking performance, handling while using Full Self-Driving, improvements to Steer-by-Wire to Cybertruck, and even recent releases that have combatted Active Road Noise.
Tesla holds a unique ability to change the functionality of its vehicles through software updates, which have come in handy for many things, including remedying certain recalls and shipping new features to the Full Self-Driving suite.
Tesla seems to have the most seamless OTA processes, as many automakers have the ability to ship improvements through a simple software update.
We’re really excited to test the update, so when we get an opportunity to try out Comfort Braking when it makes it to our Model Y.
News
Tesla finally brings a Robotaxi update that Android users will love
The breakdown of the software version shows that Tesla is actively developing an Android-compatible version of the Robotaxi app, and the company is developing Live Activities for Android.
Tesla is finally bringing an update of its Robotaxi platform that Android users will love — mostly because it seems like they will finally be able to use the ride-hailing platform that the company has had active since last June.
Based on a decompile of software version 26.2.0 of the Robotaxi app, Tesla looks to be ready to roll out access to Android users.
According to the breakdown, performed by Tesla App Updates, the company is preparing to roll out an Android version of the app as it is developing several features for that operating system.
🚨 It looks like Tesla is preparing to launch the Robotaxi app for Android users at last!
A decompile of v26.2.0 of the Robotaxi app shows some progress on the Android side for Robotaxi 🤖 🚗 https://t.co/mThmoYuVLy
— TESLARATI (@Teslarati) March 13, 2026
The breakdown of the software version shows that Tesla is actively developing an Android-compatible version of the Robotaxi app, and the company is developing Live Activities for Android:
“Strings like notification_channel_robotaxid_trip_name and android_native_alicorn_eta_text show exactly how Tesla plans to replicate the iOS Live Activities experience. Instead of standard push alerts, Android users are getting a persistent, dynamically updating notification channel.”
This is a big step forward for several reasons. From a face-value perspective, Tesla is finally ready to offer Robotaxi to Android users.
The company has routinely prioritized Apple releases because there is a higher concentration of iPhone users in its ownership base. Additionally, the development process for Apple is simply less laborious.
Tesla is working to increase Android capabilities in its vehicles
Secondly, the Robotaxi rollout has been a typical example of “slowly then all at once.”
Tesla initially released Robotaxi access to a handful of media members and influencers. Eventually, it was expanded to more users, so that anyone using an iOS device could download the app and hail a semi-autonomous ride in Austin or the Bay Area.
Opening up the user base to Android users may show that Tesla is preparing to allow even more users to utilize its Robotaxi platform, and although it seems to be a few months away from only offering fully autonomous rides to anyone with app access, the expansion of the user base to an entirely different user base definitely seems like its a step in the right direction.
What is Digital Optimus? The new Tesla and xAI project explained
Tesla adds awesome new driving feature to Model Y
