After several years of exceptional performance, Tesla Inc. (NASDAQ:TSLA) stock has taken a hard hit in 2022 as rising interest rates have triggered a rotation out of growth stocks.
Growth stock weakness has generated big profits for short sellers, and Tesla is among several auto industry stocks that have been home run trades for short sellers so far this year.
The Numbers: Auto and truck manufacturing stocks currently have $27.6 billion in total short interest. S3 Partners analyst Ihor Dusaniwsky said Friday that auto and truck manufacturing industry short interest has increased by $6.4 billion in the past 30 days, led by a surge in short interest for Rivian Automotive Inc. (NASDAQ:RIVN).
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Rivian "had the largest increase in shares shorted over the last thirty days on the heels of their recall of over 12,000 vehicles due to steering issues," Dusaniwsky said.
Tesla remains the most popular short target in the auto industry with $13.3 billion in short interest, more than seven times the short interest of any other stock. Rivian is now a distant second with $1.6 billion in short interest followed by Lucid Group Inc. (NASDAQ:LCID) with $1.6 billion.
When it comes to short interest as a percentage of free float, S3 says Nikola Corp. (NASDAQ:NKLA) is the auto industry leader at 24.3% followed by Fisker Inc. (NYSE:FSR) at 24.2% and Workhorse Group Inc (NASDAQ:WKHS) at 19.8%.
Most Profitable Auto Shorts: Tesla tops the group when it comes to the most profitable 2022 shorts in the auto and truck manufacturing group. Year-to-date, Tesla short sellers have generated $8.6 billion in profits followed by Rivian short sellers with $2.4 billion in profits and Lucid short sellers with $2.3 billion in profits.
The past month has been particularly lucrative for auto stock short sellers, which have collectively generated a 27.5% return over the past 30 days. Here are the five most profitable auto stock shorts in the past month:
- Tesla, $5.4 billion profit
- Nio Inc - ADR (NYSE:NIO), $536.9 million profit
- Ford Motor Company (NYSE:F), $534.5 million profit
- Lucid, $484.2 million profit
- Rivian, $297.2 million profit
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Benzinga's Take: Most of the best-performing shorts in the auto industry in 2022, including Tesla, Rivian, Nio and Lucid, are electric vehicle stocks that are high-growth names with limited or no profitability. As interest rates rise, the cost of capital rises for these growth stocks that rely heavily on debt, making them less attractive investments.
