Hedge funds took a significant short position against Tesla Inc. just before the company released positive vehicle-sales results, leading to a share-price rally of about 40%. Despite this, some hedge funds now face potential losses due to their contrarian bets. Analysts predict Tesla's profit margins will improve, especially with lower production and raw material costs. However, the EV market faces uncertainty due to conflicting dynamics, including tariff wars and consumer rejection of EVs as "woke" transport. Trump's stance on EVs also adds to uncertainty. Many investors plan to steer clear of the EV sector, with some predicting further declines in the market. Traditional automakers are facing pressure to slow EV investments, while some startups are struggling with sub-scale operations and low margins. Overall, experts suggest more bankruptcies may be needed for the EV market to stabilize.