Investor's Corner
Sorry Jim Chanos, but the Tesla Model 3 is definitely not ‘looking to be a lemon’
A lot of Tesla’s immediate future is tied to the Model 3. Elon Musk said as much in an interview last July, when he accurately described the Model 3 ramp as a “bet-the-company” situation. This means that if the Model 3 proves a success, Tesla could take a definitive step towards Elon Musk’s Master Plan; but if the vehicle fails, it would be catastrophic for the company.
The Model 3’s failure is something that Jim Chanos, arguably the most high-profile of Tesla’s short-sellers, is looking forward to. Chanos has taken an aggressive stance against the electric car company, never hesitating to express his belief that TSLA stock is worth $0. Over the years, the prominent short-seller has frequently attacked the electric car maker, pointing out Elon Musk’s alleged fraudulent activities and Tesla’s weaknesses as a company.
So far, Chanos’ bet against Tesla has not been paying off. His hedge fund, Kynikos Capital Partners, has not done very well since 2015, a time in which he held a short position against Solar City, and not long before he announced that he was shorting Tesla. Including a 9% loss through July of this year, Kynikos exhibited a net annualized return of 4.86% since 2015, compared with the S&P 500’s return of 12.17% during the same period.
Considering the high-stakes bet that Tesla took with the Model 3, the success of the electric car is something that would not do any favors for Kynikos’ already-embattled year. Chanos, for his part, noted in a recent interview with Institutional Investor that he still likes his odds on Tesla. He does, for one, believe that Elon Musk “handcuffed” himself by promising profitability during the second-half of 2018. He also believes that there are inherent problems with the Model 3, as shown in its production slowdowns in August and alleged issues with the vehicle.
“It’s looking to be a lemon,” Chanos said.
As the third quarter draws to a close, the prominent short-seller’s thesis against Tesla would be put to the test. The electric car maker, after all, has set aggressive targets for itself this Q3, aiming to build 50,000-55,000 Model 3 during the quarter while attaining profitability. Whether Tesla could accomplish its ambitious objectives remains to be seen, but there is one thing that is starting to become evident — the Model 3 does not seem to be a lemon at all.
The electric car’s production issues are well-known, and the teething problems that Tesla exhibited in the vehicle’s initial run were evident, as shown by the first observations of teardown specialist Sandy Munro when he started tearing down an early-production Model 3. But even Sandy Munro eventually admitted that behind the inconsistent panel gaps and imperfect fit and finish issues of the early production Model 3 he tested, he was thoroughly impressed with Tesla’s battery technology, electronics, performance, and ride quality. Tesla’s fit and finish on the Model 3 has improved since the car that Munro tested rolled off the assembly line, and the vehicle has only gotten more praise since then.
The electric car, particularly the Model 3 Performance, has practically garnered unanimous praise from professional auto reviewers. Various auto journalists, from the Wall Street Journal to Car & Driver to Road & Track (to name a few), have praised the vehicle, with the consensus being that it is a car that can disrupt the high-performance sedan market dominated by longtime legends such as the BMW M3.
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- The Tesla Model 3 gets crash tested by the National Highway Traffic Safety Administration. [Credit: NHTSA]
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- The Tesla Model 3 gets crash tested by the National Highway Traffic Safety Administration. [Credit: NHTSA]
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- The Tesla Model 3 gets crash tested by the National Highway Traffic Safety Administration. [Credit: NHTSA]
The Tesla Model 3 gets crash tested by the National Highway Traffic Safety Administration. [Credit: NHTSA]
The Model 3 was given a flawless 5-Star safety rating by the Highway Traffic Safety Administration as well, garnering perfect scores in all categories and subcategories. Videos of the vehicle’s frontal crash, side crash, and rollover crash depicted the electric sedan providing ample protection for its driver and passengers during collisions. With the Model 3’s rating, all of Tesla’s vehicles currently in production now have the distinction of having 5-Star safety ratings from the NHTSA.
Recent reports from the Tesla community in both the United States and abroad also indicate that the company has adopted an aggressive delivery schedule for reservation holders, with centers reportedly conducting handovers until 10 p.m. Other reports further suggest that Tesla’s delivery centers are handing over up to 100 cars per day.
Tesla’s capability to become profitable is linked to the Model 3, which would comprise the majority of its sales this quarter. A vote of confidence for this came in the form of analyses from a German teardown firm and Detroit’s Munro and Associates, both of which concluded that Tesla could make a profit with the Model 3. Munro, for one, noted after his teardown of the Long Range RWD Model 3 that the vehicle could give Tesla a 36% profit. More expensive trims, such as the Long Range Model 3 AWD and the Model 3 Performance, are likely even more profitable.
The third quarter is not yet finished, and much of Tesla’s production and delivery progress remains unknown. But all things considered, Jim Chanos’ bet against the Model 3 as a vehicle could very well end up being a disappointment for the esteemed short-seller.
Investor's Corner
Tesla gets its best analysis from Morgan Stanley as ‘it’s all about to change’
He maintained its ‘Overweight’ rating and the $410 price target Morgan Stanley had on the stock.
Tesla has gotten perhaps its best analysis from Morgan Stanley in quite some time, as the Wall Street firm claims that “it’s all about to change.”
That phrase could be used for both the company’s status and the world in general.
Analyst Adam Jonas said in a new note on Thursday to investors that Tesla could be one of the major winners in terms of the global transition from what it is now to what it will be.
He describes the global shift that will occur over the next few years:
“Have you interacted with a robot today? Have you even seen a robot today? No? Well, take a mental picture because it’s all about to change. When we meet someone who has never been in a Waymo or a Tesla Cybercab (which is most people), we frequently see a wince and a response such as ‘I’m not sure I’d feel comfortable getting in a car without a driver.’ We imagine going back in time to 1903 and asking people if they’d feel comfortable in an airplane.’”
The same technological revolutions that have occurred over the past 150 years will continue to occur again and again. We are on the verge of another, Jonas believes, as companies like Tesla are working on artificial intelligence tech, which includes changing the way we look at things like transportation and labor.
Jonas includes an interesting tidbit in his note about how humanoid robots could change wages, and how it could work into the advantage of Tesla, especially as it is developing its own Optimus robot:
“We estimate 1 humanoid robot at $5/hour can do the work of 2 humans at $25/hour, generating an NPV of approximately $200k/humanoid. 1 robot shaped car can potentially drive down cost/mile of a ride share vehicle to <$0.20 mile (1/10th human-driven ride-share).”
Jonas sees Tesla as a key player in how AI will impact things like manufacturing and various automotive industries, and he believes there is long-term potential for AI, robomobility, and even autonomous eVTOL platforms.
Tesla stock: Morgan Stanley says eVTOL is calling Elon Musk for new chapter
He maintained its ‘Overweight’ rating and the $410 price target Morgan Stanley had on the stock.
Elon Musk
Tesla stock gets crazy prediction from CEO Elon Musk
Musk says this is what it would take to be a millionaire from a Tesla investment right now.
Tesla stock (NASDAQ: TSLA) got a crazy prediction from CEO Elon Musk recently, as the future of the company seems to be moving more toward AI, autonomy, and robotics, and away from automotive, which is what it has traditionally been recognized as.
Over the past few years, as Tesla has prioritized its Full Self-Driving suite, its rollout of a dedicated Robotaxi program, and the development of the Optimus bot, the company has gained a new reputation from analysts.
It was always looked at as a stock with tremendous potential by many Wall Street firms, some more than others.
The most bullish analysts, like Cathie Wood of ARK Invest, believe the company will eventually reach a multi-trillion-dollar valuation and a share price of over $2,000. Her $2,600 price target does not include any contributions of Optimus. Instead, it leans on Full Self-Driving and Robotaxi.
Based on where the company is now, there are a lot of potential catalysts. The Robotaxi expansion, as well as affordable vehicles, its prowess in AI and Robotics, and its powerful energy division are all arguments for investment.
One X user said that a $150,000 investment in Tesla right now would likely make you a millionaire. Musk said he thinks that sentiment is “probably correct.”
I think this is probably correct
— Elon Musk (@elonmusk) August 5, 2025
He’s echoed this belief in recent earnings calls, including the one for Q2, which happened in July:
“I do think if Tesla continues to execute well with vehicle autonomy and humanoid robot autonomy, it will be the most valuable company in the world. A lot of execution between here and there. It doesn’t just happen. Provided we execute very well, I think Tesla has a shot at being the most valuable company in the world. Obviously, I am extremely optimistic about the future of the company.”
Tesla is trading at $316.50 at the time of writing, and has a market cap of just under $1 trillion.
Elon Musk
Tesla stock gets another analysis from Jim Cramer, and investors will like it
“Tesla is morphing right now. It’s in transition from being a car company to being a technology company.”
Tesla stock (NASDAQ: TSLA) got its latest analysis from Jim Cramer, and investors will like what he has to say.
Cramer has flip-flopped his thoughts on Tesla shares many times over the years. One time, he said CEO Elon Musk was a genius; the next, he said Ford stock was a better play. He’s always changing his tune.
However, Cramer’s most recent analysis is of a bullish tone, as he talks about the company’s evolution from an automaker to a tech powerhouse. He made the comments on CNBC’s Mad Money:
“Tesla is morphing right now. It’s in transition from being a car company to being a technology company. You wanna be in there because the tech is worth a lot more than what it’s selling for right now. Don’t care where you bought it, care where it’s going to.”
Jim Cramer last night on $TSLA: “Tesla is morphing right now. It’s in transition from being a car company to being a technology company. You wanna be in there because the tech is worth a lot more than what it’s selling for right now. Don’t care where you bought it, care where… pic.twitter.com/WzlPdQD7gq
— Sawyer Merritt (@SawyerMerritt) August 5, 2025
Tesla has always been looked at by the mainstream media as an automaker. While that is its main business currently, Tesla has always had other divisions: Energy, Solar, Charging, AI, and Robotics. Some came after others, but the important point is that Tesla has not been an automaker exclusively for a decade.
It launched Powerwall and Powerpack in April 2015, marking the start of Tesla Energy.
But Cramer has a point here: Tesla is truly becoming much more than a car company, and it is turning into an AI and overall tech company more than ever before. Eventually, it will be recognized as such, more so than it will be as an automotive company.
Cramer’s comments also follow a recent prediction by Musk, who stated on X that he believes a $150,000 investment in Tesla shares right now would eventually turn someone into a millionaire:
I think this is probably correct
— Elon Musk (@elonmusk) August 5, 2025
Musk has said he believes Tesla could be headed to a serious increase in valuation. Eventually, it could become the most valuable company in the world. He said this during the Q2 Earnings Call:
“I do think if Tesla continues to execute well with vehicle autonomy and humanoid robot autonomy, it will be the most valuable company in the world. A lot of execution between here and there. It doesn’t just happen. Provided we execute very well, I think Tesla has a shot at being the most valuable company in the world. Obviously, I am extremely optimistic about the future of the company.”
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