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Electric vehicle (EV) stocks have been volatile in 2025, driven by clean energy policy changes. While giants like Tesla (TSLA) and Rivian (RIVN) often dominate the headlines, some smaller EV players have become prime targets for short sellers looking to profit from their struggles. However, high short interest can sometimes have the opposite effect, fueling powerful rallies when traders rush to cover their bets.
One of the latest examples is Faraday Future Intelligent Electric (FFAI). The stock surged to a new six‑month high on July 24 after a burst of buying activity sent short sellers scrambling. With more than a quarter of its float sold short, Faraday’s recent rally has been amplified by meme-style trading momentum. Here’s why FFAI’s short squeeze is turning heads and what it could mean for investors watching this embattled EV stock.