Big‑short investor Michael Burry calls Tesla overvalued; filings and DCF say market is pricing speculative AI/autonomy upside

What happened

Michael Burry’s recent public claim that Tesla is overvalued echoes the company filings and our DeepValue work: revenue growth has cooled, automotive profitability and operating income are well below 2022 peaks, and recent quarters show delivery weakness while management is plowing capital into AI, Robotaxis, FSD and Optimus. Management is selling a narrative of an AI/robotics transformation, but the SEC filings and Q‑reports show those businesses remain unproven economically and legally, even as capex and R&D keep pressure on margins and free cash flow. At roughly $1.5tn market value (TTM P/E ~259x, EV/EBITDA ~93x), the stock prices highly optimistic outcomes for Robotaxis, FSD subscriptions and robots that the financials do not yet support. Our simple DCF using recent FCF history produces an intrinsic value near ~$40/share — roughly 90% below the current price — which implies virtually no margin of safety for a cyclical, capital‑intensive manufacturer. Burry’s remark is a sentiment accelerant, not new fundamentals, but it highlights that a growing cohort of sophisticated investors now publicly view current multiples as detached from disclosed results and realistic execution timelines.

Implication

There is minimal margin of safety: Tesla’s valuation assumes large, high‑margin service businesses (Robotaxis, FSD subscriptions, Optimus) that are not yet evidenced in disclosed unit economics, utilization, or regulatory clearance. Until Tesla reports sustained re‑acceleration in deliveries, margin expansion in automotive/energy, or transparent Robotaxi/FSD monetization metrics, the risk of a meaningful re‑rating is high and downside could be large. Investors long the name should cut position size or hedge exposure; prospective buyers should wait for demonstrable progress on the monitoring dashboard (paying FSD subscriber growth, Robotaxi utilization and unit economics, energy gross margins and sustained FCF above maintenance capex). Michael Burry going public increases the probability of sentiment‑driven volatility and could force short‑term price moves that are disconnected from medium‑term fundamentals. We would only consider moving away from STRONG SELL after multi‑quarter proof of profitable scale in autonomy/services or a durable, company‑level margin recovery that is not driven by temporary price promos or one‑off credits.

Thesis delta

Our core thesis remains unchanged and in fact is modestly strengthened: the Motley Fool article adds no new fundamental evidence but confirms that prominent value investors view the stock as priced for heroic execution. Burry’s public stance raises near‑term downside risk via sentiment and increases the urgency of the watch items we listed; absent concrete proof points we retain STRONG SELL.