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.
Electric vehicle maker Lucid Group has denied rumors of an imminent bankruptcy after a report from this morning sent the stock on a dramatic drop on Wall Street, seeing losses of more than 40 percent during trading hours.
Lucid’s Director of Communications, Nick Twork, responded to the report from Eletric-Vehicles.com, which stated the company’s restructuring advisor, AlixPartners, was asked to review two decisions: taking Lucid shares private or filing for Chapter 11 bankruptcy protection.
The report also claims AlixPartners told the Lucid board to “concentrate on Gravity production while improving its quality, and to temporarily hold back the Lucid Air, the sedan that has defined the company since its launch.”
Twork said:
$LCID The rumors are completely false. The company has sufficient liquidity to carry its operations well into next year, as recently published in its last quarterly filings, and it has not formed any special Board committee to explore the scenarios reported today. Our focus is…
— Nick Twork (@ntwork) July 14, 2026
Shares rebounded after the response to the report, halving its losses as the trading day neared 3 p.m. Eastern.
Lucid has struggled to get its sales off the ground and into more respectable numbers, but the company is in its early years, when things are hard to begin with. It is also backed by several notable investors, including the Saudi Public Investment Fund (PIF), which has nearly limitless money and likely would not ditch an investment of this size so soon.
Lucid shares were down just 14 percent at the time of publication, a far cry from the 55 percent its losses topped out at during the day.
Tesla received a price target upgrade just on the heels of what was a crazy successful quarter for its automotive business, as the company reported a delivery beat of over 15 percent for Q2.
Jefferies analysts are upping Tesla’s price target (NASDAQ: TSLA) to $400 from $375, while maintaining their “Hold” rating on shares, and the strong automotive deliveries from Q2 is a big reason. However, there are some other catalysts that Jefferies believes position Tesla for a strong position in the second half of the year.
Strong Deliveries
Tesla reported 480,000 deliveries for Q2, while Wall Street was between 395,000 and 405,000, as an overall consensus. It was an incredibly strong quarter from a delivery perspective, and Tesla sold well more than it produced during the three months.
Tesla crushes Wall Street expectations, beats delivery estimates by over 15 percent
While vehicle deliveries are not necessarily looked at in the light that they used to be, Tesla still maintains a lot of advantages for keeping deliveries strong. With the loss of the $7,500 EV Tax Credit last year, Tesla still maintains a strong demand case for its EVs.
Robotaxi Performance
Tesla has been operating Robotaxi for over a year now, as it launched in Austin in mid-2025. That program has expanded to Houston and Dallas, the San Francisco Bay Area, and, most recently, Miami, Florida, the suite’s first appearance in the Sunshine State.
While the Robotaxi suite is still in its early phases and Tesla is working through things like fleet size and wait times, the company has been able to undercut the pricing of its competitors and has a great safety record.
Merger Speculation with Tesla and SpaceX
This is perhaps the biggest topic that many are speaking about with Tesla and SpaceX, and it is the one thing that seems to be on the mind of every investor.
Jefferies warns that growing talk of a Tesla-SpaceX merger could cause Tesla stock to trade more like a SpaceX proxy, which may disconnect it from underlying automotive fundamentals. SpaceX has a lot going for it, especially its compute deals that have been widely publicized as of late.
Profitability in New Projects Could Take Some Time
Tesla has a few long-term ventures in the pipeline, most notably the Optimus project and Robotaxi, which is launched but will take several years to expand to a meaningful level that resonates with everyday people.
This is something that investors need to be careful of. Tesla’s projects could take some time to round out, so Jefferies advises that these may carry initial losses, rather than immediate profit. Seasoned Tesla investors have echoed something like this for a long time; they knew going in it would not be an open-and-shut strategy. It was going to take time.
These new projects are no different.
Investor's Corner
NASA taps SpaceX to launch the telescope that could unlock new worlds
NASA’s Roman Space Telescope heads to orbit this August aboard SpaceX’s Falcon Heavy with massive scientific ambitions.
SpaceX is set to play a central role in one of NASA’s most anticipated science missions in years. The company’s Falcon Heavy rocket, currently the most powerful operational launch vehicle in the world, will carry the Nancy Grace Roman Space Telescope into orbit on August 30 from Kennedy Space Center in Florida. Roman is now in final preparations inside the Payload Hazardous Servicing Facility, where on June 26 technicians used a crane to lift the observatory into a specialized stand for fueling and pre-launch testing.
Roman is named after Nancy Grace Roman, NASA’s first chief of astronomy, whose career helped shape how the agency approaches space science.
NASA chose SpaceX Falcon Heavy because of Roman’s needs to reach a specific orbit far from Earth, well beyond where a standard Falcon 9 can deliver it. The Falcon Heavy, which first flew in 2018, has since become NASA’s go-to option for missions that need serious muscle without the cost and complexity of older launch systems.
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Roman will carry a field of view at least 100 times wider than the Hubble Space Telescope, meaning it can photograph enormous swaths of the universe in a single shot rather than the narrow slices Hubble captures. That difference in scale is significant. While Hubble reshaped our understanding of the cosmos over 30 years, Roman is built to work faster and wider, surveying hundreds of millions of galaxies at once.
One of Roman’s most compelling capabilities is its potential to discover and photograph planets orbiting stars outside our solar system, and with enough precision to directly image planets that would otherwise be lost. That means scientists could study the atmosphere and surface characteristics of distant worlds rather than simply confirming they exist. Combined with Roman’s sweeping field of view, the telescope could detect thousands of exoplanets, and some of those planets may be in habitable zones where liquid water could exist. No telescope currently in operation has this level of power and capability. That capability alone could change what we know about other worlds, and perhaps finally answer the question: are we the only intelligent lifeforms in existence?
What Roman actually finds once it reaches orbit is an open question, and that is exactly what makes this launch worth watching.
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