By Lucas Nolan
Jim Chanos of Kynikos Associates criticised Elon Musk for consistently over-promising in relation to Tesla in a recent interview.
Jim Chanos, a long time short seller of Tesla stock, slammed Tesla CEO Elon Musk for over-promising on car production times in a recent interview with CNBC.
Chanos discussed Elon Musk saying: “What bothers me is not so much the personal stuff and the personal attacks. I’m used to that. It’s the willingness to say things that I think he knows are a stretch, to be polite.”
He continued: “I don’t think you get to tell people you’re going to make 20,000 Model 3s a week when you know that’s not going to be the case,” said Chanos referencing the “production hell” the Tesla’s Model 3 went through to reach a milestone of 5000 cars produced a week. In order to reach this milestone, Tesla allegedly stopped brake testing their cars and assembled many of them in a makeshift outdoor assembly line constructed of spare parts.
Chanos also alleged that Musk had similarly over-promised in relation to his other company, The Boring Company. “You don’t get to tell the city of Chicago, I’m going to build a tunnel and do it in a couple of years for a billion dollars through 20 miles of residential area. You know that’s probably not going to happen,” said Chanos.
Chanos also denied recent allegations from Musk that he had paid off journalists for insider information about Tesla: “We talk to journalists all the time. We have never received insider information from any journalist at any time, including Tesla. And we’ve never paid any journalists,” said Chanos. “These are serious charges. When you make serious charges, you ought to bring serious evidence.”
Chanos has a long history of claiming companies may be misrepresenting themselves to investors, famously being one of the first people to warn the public about Enron, the famously successful energy giant that was eventually revealed to be a fraud.