Hedge fund manager Dan Niles has revealed that he is still shorting Tesla ‘s stock, despite being bullish on the broader market. Niles, cofounder and portfolio manager of the Satori Fund, told CNBC’s “Squawk Box” Tuesday that he sees significant headwinds for Tesla in the months ahead that could push the stock lower. TSLA YTD line Having more than doubled in value this year, Niles said the stock now faces a very different environment to earlier this year. Specifically, he cited surging interest rates, with the 10-year Treasury yield spiking to 4.8% recently, as creating a challenging backdrop for auto sales. Rising rates have pushed up the typical new-vehicle loan interest rate to 9.62% , according to Cox Automotive. Its data shows that it now takes 42.1 weeks of median income to purchase a new car — up from an average of 34 weeks before the pandemic. “Higher financing costs driving up the cost of cars for the average consumer, combined with the fact that the stock is up a lot, and we think it’s a good relative short paired up with a lot of the other names that were long in technology,” Niles said. Tesla delivered 435,059 cars in the third quarter, less than expected and lower than the 466,140 cars delivered in the previous three months. However, Tesla said it continues to target its previously declared goal of 1.8 million vehicle deliveries for the whole of this year. The lower delivery numbers were released despite price cuts for its Model 3 and Model Y vehicles earlier in the year. Together, Niles said the statistics were “indicative of there being continued pressure on gross margins going into the future.” It should be noted that Niles’ Tesla short position is relatively small and accounts for about 1% of his portfolio. In contrast, the fund manager has previously made aggressive bets of up to 15% of the fund on stocks where the hedge fund has had a high conviction. While Niles views Tesla’s stock as relatively overvalued, he is constructive on the company. “We like the company. I own a Tesla. I own a Model X. I think it’s a great product,” Niles told CNBC Pro. “I think Elon Musk is the Thomas Edison of our generation. I love the company. I just think the stock is expensive, given that estimates have to probably [come] lower.” Niles also explained that he’s currently “bullish” on the overall market as less than 10% of his fund’s holdings are shorts currently, compared to a historical average of around 50%.