Jim Chanos Thinks Tesla Stock Is 'Ridiculously Overvalued:' 'They Basically Were.. Doing The Wrong Thing For 7 Years'

Tesla in many ways, epitomises this bull market. It's a hopes and dreams stock. It's trading at 75x earnings which aren't growing anymore," Chanos told Bloomberg.

"We just think it's ridiculously overvalued," he added.

The Tesla story keeps changing, Chanos, the founder and President of Chanos & Co., said in an interview with Bloomberg.

"Every every few months the Tesla faithful trot out a new [theme] – it's batteries, it's robotaxis, now it's AI," the Chanos said. Tesla shares have also been chased up because car makers will be using its charging network. Rinse and repeat.

"I'm a little bit bemused having followed the company as long as we've been following it, that Tesla sort of admitted just recently, with its full self-driving effort, that it had been pursuing sort of the wrong avenue for seven years," he said. It's now going to a different type of software development for the next iteration of full-self driving beta, he added.

"And I am just sort of wondering this technological leader told you that they basically were.... doing the wrong thing for seven years," Chanos said.

The problem now is that the FSD the company has been selling as a product since 2016 doesn't exist, he said, adding, "This is a company that has gotten a wide berth from regulators in all facets."

Customers pay for the Full Self-Driving package in the hope that they get full autonomy when it is available. It was never available. No wonder, Tesla EVs are so profitable.

Early this year, Chanos warned that good times are over for Tesla bulls, premising his view on his expectations that the company's profits would be under pressure permanently amid the price cuts.

"Ultimately it's still just another cyclical car stock, not to be confused with a tech stock," he had said then.

In July, Chanos aimed at Tesla's FSD and said, "The current value of the Tesla 'Full Self-Driving' package is probably close to zero in the retail market."

"Remember that Musk has said that owning an FSD package will increase the value of your Tesla vehicle by multiples of the FSD package cost itself. Yet ascribes almost no value to it upon repurchase. In fact, over time it depreciates faster than the vehicle itself," he added.