If you do not allow Schwab to let another customer borrow your shares, then Schwab will have to buy the shares in the open market and lend them to to the other customer. Of course that other customer will immediately sell the shares short. In this case there should be no net effect on the share price once both trades are complete. However, if you agree to Schwab's proposal, then the inevitable short sale could add to downward pressure on the share price with no previous purchase by Schwab to compensate.
True. But if someone holding TSLA as a long term investment, letting shares to be short sold now wont affect long term price, because if Tesla will be successful, shorts will go away and would have to cover anyway. Plus such action will help those who still investing into TSLA to jump in at lower price point.
If Tesla will go down, you will at least make some money.
But sure letting shorts to borrow your shares is damaging to Tesla. Tesla will have to use more shares in a near term for stock based compensations. And if Tesla will need to raise more capital in near future, TM will do it on less favorable terms. Diluting positions of current shareholders.
Anyhow, money is a money, and if you not need shares for any other purposes (you are not trying to time the market, position is not part of margin account), then why not? And unless we are talking about hundred thousands shares or more, your decision wont affect share price in any significant way. May be if hundreds small shareholders will fall for a Schwab's offer than we would be talking... About 0.1% price drop. But implication for your wallet - you can directly calculate how much would you make, and is it worth bothering provided size of your position and your financial situation.
On a side note, Schwab would not neseserely would have to buy TSLA shares, they might increase payouts to potential lenders of shares in attempt to get more shareholders to loan.