Jim Chanos Says Tesla Inc (TSLA) Is Heading For A "Brick Wall"

Tesla Inc (NASDAQ:TSLA) shares are “headed for a brick wall,” according to money manager and Tesla permabear Jim Chanos.

At an event in Detroit this week, the analyst noted that “Every bull market has its poster children,” and “Tesla is one of the bad ones.” Bloomberg has more details about Chanos’ ongoing bearish view on the electric automaker:

Chanos has been public about his short position in Tesla Inc. for more than a year. When Tesla was in the process of merging with SolarCity Corp. in September 2016, he said the combined company would be a “walking insolvency.” Shares of the Elon Musk-led carmaker closed at $196.05 that day and at $339.03 on Wednesday.
While Chanos has made wayward bets against U.S. stocks and China recently, he built his reputation by wagering that Enron Corp. would fail and was proven correct. He said Wednesday that the spate of executive departures Tesla has endured this year is reminiscent of Enron before its fall. Chanos also said his short against Tesla has lost him money to this point and he doesn’t know when its stock actually will decline.

Chanos believes that charismatic CEO Elon Musk will actually leave Tesla within the next few years to concentrate on his true passion, SpaceX. Others aren’t so sure — Morgan Stanley’s Adam Jonas, for example, predicts that Tesla will actually merge with SpaceX one day soon.

While Chanos admits that Musk achieved something great that no one else had been able to do, Tesla’s days as an EV leader are numbered. “What Elon did was simple: He made EVs sexy,” he said. “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.”

Tesla Inc shares rose $0.57 (+0.17%) in premarket trading Thursday. Year-to-date, TSLA has gained 58.66%, versus a 21.04% rise in the benchmark S&P 500 index during the same period.

TSLA currently has a StockNews.com POWR Rating of C (Neutral), and is ranked #18 of 24 stocks in the Auto & Vehicle Manufacturers category.

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