Connect with us

Investor's Corner

Tesla’s most prolific short-seller Jim Chanos claims TSLA investors are overlooking a big risk

(Credit: Tesla)

Published

on

During a recent appearance at a podcast this week, famed short seller Jim Chanos claimed that Tesla investors are overlooking something very risky about the company. Chanos noted that today, Tesla resembles Cisco Systems back in 1999, a company widely considered the poster child of the dot-com bubble. 

Chanos is considered one of Tesla’s largest critics, declaring back in 2017 that the company is worth zero. “We think the equity is worthless,” Chanos said in an interview then. But while he has since been proven wrong amidst Tesla’s meteoric rise and strong financials, Chanos noted that he is still short Tesla via put options. 

The short seller stated that a big risk to Tesla currently underappreciated by TSLA investors is the company’s reliance on Gigafactory Shanghai for its profits. Chanos, while speaking at Bloomberg‘s Odd Lots podcast, admitted that Tesla turned the corner on profitability once its China plant began operations. 

He still, however, considers Tesla as only a car company. “And we have a large suspicion that a disproportionate amount of the profits are coming out of Shanghai. And that raises all kinds of other risks to the multiple. Make no mistake about it. Tesla is a car company. They’re building car plants. They’re capital intensive,” he said

For context, Tesla is also building energy storage devices for both residential and industrial applications. The company is also neck-deep in AI projects with its FSD initiative and projects like its humanoid robot, Optimus. In recent years, Tesla has also started dipping its toes into the battery manufacturing market. 

Advertisement

Chanos, for his part, stated that Tesla is still trading at an expensive valuation of 10x revenues and more than 30x gross profits. Tesla’s valuations, according to the short-seller, could only be justified if the company dominates EVs for years to come. But with competition from rivals like Ford with its F-150 Lightning, Chanos noted that Tesla could simply become an established EV company among many EV companies. 

“Tesla, which is earning, you know, trading at just a monster multiple, is also trading on a monster multiple profit stream that is going to get competed. And that is the risk of Tesla that becomes just an established EV company amongst a whole bunch of established EV companies,” Chanos said. 

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

Comments

Investor's Corner

Tesla “best positioned” for Trump tariffs among automakers: analyst

Ives has a price target of $315 per share for the electric vehicle maker.

Published

on

Credit: Tesla

Wedbush analyst Dan Ives recently shared his thoughts about Tesla (NASDAQ:TSLA) amidst the Trump administration’s tariffs. As per Ives, Tesla is best-positioned relative to its rivals when it comes to the ongoing tariff issue.

Ives has a price target of $315 per share for the electric vehicle maker.

Best Positioned

During an interview with Yahoo Finance, the segment’s hosts asked about his thoughts on Tesla, especially considering Musk’s work with the Trump administration. Musk has previously stated that the effects of tariffs on Tesla are significant due to parts that are imported from abroad.

“When it comes to the tariff issue, they are actually best positioned relative to the Detroit Big Three and others and obviously foreign automakers. Still impacted, Musk has talked about that, in terms of just auto parts,” Ives stated.

China and Musk

Ives also stated that ultimately, a big factor for Tesla in the coming months may be the Chinese market’s reactions to its tariff war. He also noted that the next few quarters will be pivotal for Tesla considering the brand damage that Elon Musk has incited due to his politics and work with the Trump administration.

Advertisement

“When it comes to Tesla, I think the worry is where does retaliatory look like in China, in terms of buying domestic. I think that’s something that’s a play. And they have a pivotal six months head, in terms of what everything we see in Austin, autonomous, and the buildout. 

“But the brand issues that Musk self-inflicted is dealing with in terms of demand destruction in Europe and the US. And that’s why this is a key few quarters ahead for Tesla and also for Musk to make, in my opinion, the right decision to take a step back from the administration,” Ives noted.

Continue Reading

Investor's Corner

Tesla negativity “priced into the stock at its current levels:” CFRA analyst

The CFRA analyst has given Tesla a price target of $360 per share.

Published

on

Credit: Tesla China

In recent comments to the Schwab Network, CFRA analyst Garrett Nelson stated that a lot of the “negative sentiment towards Tesla (NASDAQ:TSLA) is priced into the stock at its current levels.”

The CFRA analyst has given Tesla a price target of $360 per share.

Q1 A Low Point in Sales

The CFRA analyst stated that Tesla’s auto sales likely bottomed last quarter, as noted in an Insider Monkey report. This was, Nelson noted, due to Q1 typically being the “weakest quarter for automakers.” He also highlighted that all four of Tesla’s vehicle factories across the globe were idled in the first quarter.

While Nelson highlighted the company’s changeover to the new Model Y as a factor in Q1, he also acknowledged the effects of CEO Elon Musk’s politics. The analyst noted that while Tesla lost customers due to Musk’s political opinions, the electric vehicle maker has also gained some new customers in the process.

CFRA’s Optimistic Stance

Nelson also highlighted that Tesla’s battery storage business has been growing steadily over the years, ending its second-best quarter in Q1 2025. The analyst noted that Tesla Energy has higher margins than the company’s electric vehicle business, and Tesla itself has a very strong balance sheet.

Advertisement

The CFRA analyst also predicted that Tesla could gain market share in the United States because it has less exposure to the Trump administration’s tariffs. Teslas are the most American-made vehicles in the country, so the Trump tariffs’ effects on the company will likely be less notable compared to other automakers that produce their cars abroad.

Continue Reading

Investor's Corner

Tesla average transaction prices (ATP) rise in March 2025: Cox Automotive

Tesla Model Y and Model 3 saw an increase in their average transaction price (ATP) in March 2025.

Published

on

Credit: Tesla/X

Data recently released from Cox Automotive’s Kelley Blue Book has revealed that electric vehicles such as the Tesla Model Y and Model 3 saw an increase in their average transaction price (ATP) in March 2025.

Cox Automotive’s findings were shared in a press release

March 2025 EV ATPs

As noted by Cox, new electric vehicle prices in March were estimated to be $59,205, a 7% increase year-over-year. In February, new EV prices had an ATP of $57,015. The average transaction price for electric vehicles was 24.7% higher than the overall auto industry ATP of $47,462.

As per Cox, “Compared to the overall industry ATP ($47,462), EV ATPs in March were higher by nearly 25% as the gap between new ICE and new EV grows wider. EV incentives continued to range far above the industry average. In March, the average incentive package for an EV was 13.3% of ATP, down from the revised 14.3% in February.”

Tesla ATPs in Focus

While Tesla saw challenges in the first quarter due to its factories’ changeover to the new Model Y, the company’s ATPs last month were estimated at $54,582, a year-over-year increase of 3.5% and a month-over-month increase of 4.5%. A potential factor in this could be the rollout of the Tesla Model Y Launch Series, a fully loaded, limited-edition variant of the revamped all-electric crossover that costs just under $60,000.

This increase, Cox noted, was evident in Tesla’s two best-selling vehicles, the Model 3 sedan and the Model Y crossover, the best-selling car globally in 2023 and 2024. “ATPs for Tesla’s two core models – Model 3 and Model Y – were higher month over month and year over year in March,” Cox wrote.

Advertisement

Cox’s Other Findings

Beyond electric vehicles, Cox also estimated that new vehicle ATPs held steady month-over-month and year-over-year in March at $47,462, down slightly from the revised-lower ATP of $47,577 in February. Sales incentives in March were flat compared to February at 7% of ATP, though they are 5% higher than 2024, when incentives were equal to 6.7% of ATP. 

Estimates also suggest that new vehicle sales in March topped 1.59 million units, the best volume month in almost four years. This was likely due to consumers purchasing cars before the Trump administration’s tariffs took effect. As per Erin Keating, an executive analyst at Cox, all things are pointing to higher vehicle prices this summer. 

“All signs point to higher prices this summer, as existing ‘pre-tariff’ inventory is sold down to be eventually replaced with ‘tariffed’ inventory. How high prices rise for consumers is still very much to be determined, as each automaker will handle the price puzzle differently. Should the White House posture hold, our team is expecting new vehicles directly impacted by the 25% tariff to see price increases in the range of 10-15%,” Keating stated.

Continue Reading

Trending