TESLA has reported strong worldwide sales of 25,000 vehicles for the January quarter, giving optimism to investors and some analysts while disrupting the plans of short sellers sharpening the skepticism of others.

A short sale is a share transaction in which an investor sells borrowed securities in anticipation of a price decline, and is required to return an equal number of shares at some point in the future.

A short seller makes money if the stock goes down in price, while a long position makes money when the stock goes up.

Tesla’s stock rose over six per cent on the back of its sales results leading its CEO and co-founder Elon Musk to tweet “Stormy weather in Shortville…”, as a mocking retort to those who have been short selling his company’s stock – effectively betting on its financial demise.

According to global financial information service provider Markit, those holding a short position in Tesla shares has risen to almost 30 per cent of its floated stock.

However some are more bullish on the company’s prospects.

Fairfax media have reported Robert W Baird & Co analyst Ben Kallo as saying, “I’m not an Elon Musk worshipper, but people that would normally buy a Porsche are buying Teslas right now”.

“They’re a better car manufacturer, they attract better talent and they have more things going on beyond their four walls than we know about,” he said.

Mr Musk certainly has attraction to Wall St investors from whom he has raised about $US8 billion ($A10.5 billion) in equity and debt offerings since 2010 according to Bloomberg data.

Tesla’s market capitalisation surpassed that of both Ford and General Motors on the back of its share price surge, rising to $US52.08 billion ($A68.52 billion) despite the fact that it produces only a fraction of the cars that either Ford or GM does.

Much of the investor interest is based on the forthcoming Tesla Model 3 sedan that is expected to sell for about $US35,000 ($A46,000). Mr Musk has predicted that with Model 3 in the lineup the company’s annual production will ramp up to 500,000 by 2018.

But not everyone has a positive view of Tesla’s prospects.

Bob Lutz is a well known US auto industry identity and former vice chairman of General Motors who has also held senior positions at BMW, Chrysler and Ford.

Mr Lutz made a series of comments related to Tesla and Mr Musk during a recent interview with US news service CNBC.

“Tesla supporters are like members of a religious cult,” he said. “Just like Steve Jobs was worshiped at Apple, it’s the same way with Elon Musk … seen as a new visionary god who promises this phantasmagorical future, a utopia of profitability and volume.

“I just don’t see anything about Tesla that gives me any confidence that that business can survive,” said Mr Lutz suggesting that the company could go bankrupt “unless people keep pouring new money in ad infinitum.

“If you’re not recovering labor and materials in your sell price, then doing twice as many or three times as many or four times as many doesn’t help. The losses just get bigger and bigger.”

By Daniel Cotterill