Tesla had a major short squeeze started in 2013 ($30~$280). At the time the short ratio was like 50%, the market cap was very small, and shorts were very confident Tesla will fail. As Tesla went higher, those guys kept shorting more, long holders also kept buying because they saw what Tesla was turning into. In the end, lots of shorts got hurt.
Now the situation is different. The short ratio is much lower than 50%, more like 25%, also many shorts are aware of the potential upside of Tesla. The market cap is 10 times larger than in 2012~2013. I think the likelihood and the amplitude for a short squeeze is smaller compared to 2013. Some small squeeze 20~30% could still happen from time to time.
Personally I ignore the volatility, invest in Tesla for the next 10~15 years. I see a less than 5% chance to lose the money, more than 80% chance to get many fold gain. Whenever the stock dives, I add more shares. Then go make money get ready to add more shares. I don't use margin.