Investor's Corner
Dissecting Jim Chanos’ short seller arguments about Tesla
All innovative companies attract negative press coverage, but the tide of anti-Tesla scare stories and misinformation has reached such preposterous proportions that it has become a story in itself (remember, colleagues, we’re supposed to report the news, not make it). It’s widely believed that much of the mud, especially the articles that focus on financial and stock-market topics, originates with short sellers, who have collectively bet some $12 billion against the California carmaker.
Perhaps the best-known and most articulate of the short sellers is Jim Chanos, a hedge fund operator who distinguished himself by calling attention to Enron’s shenanigans back in 2000. Chanos has made no secret of his disdain for Tesla, or his interest in profiting from its demise. Chanos figures prominently in Matt Taibbi’s 2014 book, The Divide: American Injustice in the Age of the Wealth Gap. A recent series of posts on the Tesla Motors Club forum argues that Chanos and other shorts are following a tried-and-true playbook that they’ve used to attack other companies in the past.
Enter Galileo Russell, a young independent stock analyst, who became something of a hero among Teslaphiles when Elon Musk granted him a lot of quality time on a now-famous conference call. In a new video, Russell answers Chanos’s bearish arguments about Tesla point by point.
Above: Galileo Russell takes on infamous Tesla short Jim Chanos (Youtube: HyperChange TV)
-->Chanos is no mindless naysayer or anonymous comment-section troll. “He has a reputation for being one of Wall Street’s best and sharpest short sellers and for good reason,” says Galileo. “His hedge fund Kynikos Associates [the name comes from the Greek for “cynic”] has a track record that has crushed the market.” Furthermore, Chanos has been “very vocal and public and transparent about his short of Tesla for years – he’s done a ton of interviews on CNBC and Bloomberg explaining his short rationale, so this gives me a ton of material to really understand what his thinking is.”
Galileo has “a ton of respect” for Chanos, but thinks “he is wrong on this trade.” In this video, which is worth watching all the way through, the exuberant young pundit answers the diehard bear’s long list of anti-Tesla arguments one by one.
Chanos and others have made much of Tesla’s supposedly high rate of executive departures (“rats leaving a sinking ship”). However, according to Galileo, “He has cherry-picked the names of 39 Tesla executives who’ve left over the past two years.” Tesla has 37,000 employees. The average tenure of departing execs has been about 4.6 years – not far off the 5.3-year average term of execs at the largest US companies. Mr. Russell also reminds us of a certain group of leaders who haven’t jumped ship, and don’t seem likely to: CEO Elon Musk (15 years with the company); CTO JB Straubel (14 years); CFO Deepak Ahuja (10 years) and Senior Design Director Franz von Holzhausen (8 years).
Is Tesla “structurally unprofitable,” as Chanos claims? Maybe, but so was a certain other growing tech company called Amazon. Is Tesla indulging in creative accounting by not including its R&D expenses in gross margins? Nope – unlike legacy OEMs, most of Tesla’s R&D goes for future products. Tesla’s accounting isn’t deceptive, says Galileo – it’s just more like that of a tech company than a traditional automaker.
Galileo goes on to address several more of Chanos’s anti-Tesla points: coming competition from the legacy automakers (almost no one in the EV industry takes this threat seriously – Big Auto has made it abundantly clear that its main agenda is to hold back the tide of electrification, not join it); delays in rolling out Autopilot, the Semi and the Roadster; and even a far-fetched notion that Elon Musk is planning to step down as CEO.
-->In every case, Mr. Russell marshals detailed facts and figures to support his rebuttals. Even if you’re a Tesla skeptic, you’ll be forced to admit that this is a virtuoso performance by an extremely well-informed and insightful analyst.
===
Note: Article originally published on evannex.com by Charles Morris; Source: HyperChange TV
Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
-->“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
-->Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Tesla FSD V14.2.1 is earning rave reviews from users in diverse conditions
Tesla FSD Supervised ride-alongs in Europe begin in Italy, France, and Germany
