Autos

Why the shorts can't stop Tesla

Deutsche Bank upgrades Tesla
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Deutsche Bank upgrades Tesla

From safety recalls to critical reviews and a heavy short position, there have been bumps along the way for Tesla Motors' stock, and yet it keeps driving forward.

The electric car maker caught a negative review from Consumer Reports on Tuesday, in which the magazine said its Model S sedan has "more than its share of problems."

The publication praised the car for its design and smoothness, but is now also detailing various issues with a Model S that it has driven about 16,000 miles. Tesla points out that its warranty covered the issues mentioned and that Consumer Reports benefits, as any owner would, from its comprehensive warranty program.

Still, the stock only fell roughly 1.5 percent in midday trading.

Tesla Model S 60
Source: Tesla Motors

To Drew Cupps, a Tesla shareholder and chief investment officer at Cupps Capital Management, the concerns might be overblown.

"Tesla is a Silicon Valley company and is competing against a lot of Old World, Rust Belt and other automakers. They just move faster. They're tackling more than anyone has ever tackled and they're doing it at a pace that no one has ever done it at, and so our standards are really high for them and they should be and they need to be met," Cupps told "Squawk Alley." "But the pace of innovation that Tesla is bringing to the marketplace is unrivaled, and I think we shouldn't lose perspective on that due to a little miss here or there."

Cramer: Why it's hard to short Tesla
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Cramer: Why it's hard to short Tesla

Indeed, there are more than a few people betting things won't work out for the electric automaker. Tesla is "just such a heavily shorted stock," CNBC's Jim Cramer told "Squawk on the Street."

"The short story was always that there's too many being made. They're going to cost too much, and what are we going to do with the battery? And the objections just kept being met and met and met," he said. "So it's a very hard short is how I look at Tesla."

It seems Deutsche Bank shares Cramer's bullish view on TSLA. The firm upgraded the stock to a "buy" following CEO Elon Musk's recent revelations about an increase in car manufacturing at its Fremont, Calif., factory.

What worries Mr. Wonderful about Tesla
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What worries Mr. Wonderful about Tesla

Separately, billionaire Kevin O'Leary told "Squawk Alley" he's "seriously thinking of getting one." During a recent visit to a Miami showroom, though, O'Leary said he has some concerns about the car's safety.

"This woman came up to me and said, 'Have you ever thought if it's good for you to sit on the world's largest battery? What's going to happen to your package?' " said O'Leary, star of the hit entrepreneur-based reality show "Shark Tank." "I had never thought of that before and actually it's bugging me now. I don't know about this yet."

"I'm going to do some research, but I've got a lot of stuff sitting above a battery. That's just a few inches [below me]. That's the biggest honking battery in the world. I'm worried about it."

Delivered deadpan, it's unclear whether O'Leary's comments were in jest, but it definitely got a lot of laughs on the set.

—By CNBC's Drew Sandholm, with CNBC Staff.

DISCLOSURE: When this story was published, Cramer's charitable trust did not own Tesla.