In an interview with CNBC, the founder of hedge fund Kynikos Associates dismissed the idea that he was wrong to bet against Tesla, arguing that the company’s share price rise over the past year is being fueled by a series of lies. “To me, where the stock is now is not the story,” Chanos, who has been adding to his short position against Tesla throughout the year, said. “I don’t care that it came from $30 or $200 or $300. That’s just meaningless. We think the equity is worthless.”
Chanos pointed to Tesla’s recent unveiling of its electric Semi truck and Roadster sports car as the latest example of the company’s inability to tell the truth to investors. CEO Elon Musk plans to make the Semi available in 2019 and the Roadster in 2020. Given that production lines generally have to be up and running years before production starts, Chanos believes these targets are impossible to achieve. (See also: Tesla Is Counting on Massive Leaps in Technology.)
“Tesla and Mr. Musk have a broad interpretation of the truth,” he said. “There have been all kinds of announcements that this company has made … that turned out not to be true.” (See also: Reports of ‘Hundreds’ of Cars at Delivery Centers Calm Tesla Production Fears.)
Chanos’s comments came shortly after he made similarly disparaging remarks about the company at an event in Detroit on Wednesday. “Every bull market has its poster children,” he said at the event, according to Bloomberg. “Tesla is one of the bad ones.”
In Detroit, the perennial Tesla bear listed a number of other reasons why he believes the company “is headed for a brick wall.” Chief among them is the recent spate of executive departures, an issue that the hedge fund manager noted also happened at Enron Corp. before it failed. Chanos built his reputation for short selling after correctly betting that the Houston-based energy, commodities, and services company would collapse.
Having already lost several important executives, Chanos reckons the next high-profile figure to leave Tesla could be its CEO. The short seller expects Musk to depart in the coming years to focus on his other company, Space Exploration Technologies Corp. (See also: Tesla Should Merge With SpaceX: Morgan Stanley.)
Chanos also expects Tesla to get squeezed by increasing competition. Now that the company’s auto peers are ramping up investment in electric vehicles (EVs), he believes what little advantage it had is set to disappear.
“What Elon did was simple: He made EVs sexy,” Chanos said, according to Bloomberg. “Prior to that you had to compromise and get something like a Prius. But now he has the entire auto world that has figured that out and is coming up with aspirational cars. He’s fighting a different fight.”
Chanos made a similar argument for self-driving technology, noting that the likes of General Motors Co. (GM), Alphabet Inc.’s (GOOGL) Waymo and Volkswagen AG (VLKAF) now represent serious threats to Tesla. “Detroit and Germany are spending billions of dollars on this,” Chanos said. “Tesla is not a leader.”