Famed investor Jim Chanos isn't convinced by the electric vehicle manufacturer.
Notorious US investor Jim Chanos has warned that Californian tech company Tesla 'is headed for a brick wall'.
Chanos, famed for advocating risky short-selling techniques on the stock market, was speaking at an event in Detroit recently and said that 'every bull market has its poster children, Tesla is one of the bad ones.' Chanos made his name – and fortune – short-selling Enron stock before the company filed for bankruptcy in 2001.
His comments come on the back of a tough year for Tesla – despite launching the Model 3 saloon and announcing a new Roadster and truck, the electric vehicle maker has faced severe production issues, quality control difficulties and financial problems which saw investors buy debt off the company in the summer.
Tesla lost £506m in the three months between July and September 2017, and at one point was burning through £361,000 an hour – more than £6,000 a minute. Reports have suggest that at that rate, Tesla's coffers will run completely dry by the beginning of August this year.
As well as its notable financial struggles, Tesla has laid off 700 employees, leading to a number of lawsuits being filed against the company due to the nature of the sackings and working conditions at the factory. Tesla employees are said to be subject to minimum 60-80 hour a week contracts.
Chanos insists that Tesla's prime market position will disappear now that other more established car manufacturers have caught up with its technological lead, meaning that what Tesla does is no longer unique. 'What Elon [Musk, Tesla boss] did was simple – he made EVs sexy,' said Chanos. '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.'
He also predicted that Musk would leave Tesla to focus on Space Exploration Technologies Corp, otherwise known as Space X, Musk's commercial space entity. Meanwhile, Morgan Stanley analyst Adam Jonas predicted that Tesla could merge with SpaceX in the near future.