Famed Short-Seller Jim Chanos Says Tesla Headed for 'Brick Wall'

Tesla Inc., a perennial target of short sellers, “is headed for a brick wall,” said investor Jim Chanos.

“Every bull market has its poster children,” the president and founder of hedge fund Kynikos Associates Ltd said at an event in Detroit. “Tesla is one of the bad ones.”

describing </a> Tesla as “structurally unprofitable” with a “way too leveraged” capital structure. Chanos famously bet early that Enron Corp. would fail and was later proven right." data-reactid="24">Chanos has been public about his short position in Tesla Inc. for more than a year. Last September, when Tesla was merging with SolarCity Corp., he called Elon Musk’s automaker a “walking insolvency.” He recently reiterated the critique on Bloomberg Television, describing Tesla as “structurally unprofitable” with a “way too leveraged” capital structure. Chanos famously bet early that Enron Corp. would fail and was later proven right.

spate </a> of executive departures at Tesla this year is reminiscent of Enron before its fall. He predicted Musk will even depart in the coming years for another of his companies, Space Exploration Technologies Corp. Morgan Stanley analyst Adam Jonas said earlier this month he could envision Tesla merging with SpaceX as the rocket company becomes a more time-consuming focus for Musk." data-reactid="25">Chanos warned Wednesday that the spate of executive departures at Tesla this year is reminiscent of Enron before its fall. He predicted Musk will even depart in the coming years for another of his companies, Space Exploration Technologies Corp. Morgan Stanley analyst Adam Jonas said earlier this month he could envision Tesla merging with SpaceX as the rocket company becomes a more time-consuming focus for Musk.

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Musk has trolled some investors in the past for betting against Tesla, tweeting in April about “stormy weather in Shortville.” Short interest has been inching higher this fall and is now about 24 percent of free float, IHS Markit data show. Tesla’s stock price has climbed about 59 percent this year, vaulting it past Ford Motor Co. in market value.

money </a> at a clip of about $8,000 a minute. The model’s roll-out has been marred by bottlenecks at its battery factory and sole auto plant. Tesla produced fewer than one fifth of the Model 3s it had targeted for the third quarter and delayed plans to reach weekly output of 5,000 sedans per week to March, from December." data-reactid="28">Tesla has been working to get its Model 3 sedan into production, burning money at a clip of about $8,000 a minute. The model’s roll-out has been marred by bottlenecks at its battery factory and sole auto plant. Tesla produced fewer than one fifth of the Model 3s it had targeted for the third quarter and delayed plans to reach weekly output of 5,000 sedans per week to March, from December.

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