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Tesla Overvaluation Sparks Michael Burry Critique
Michael Burry, the investor known for predicting the 2008 housing crash, recently criticized Tesla, calling the electric vehicle giant “ridiculously overvalued.” In a Substack post published late Sunday, Burry elaborated on his concerns about the company’s stock price and Elon Musk’s ambitious compensation plan.
Tesla Valuation Under Scrutiny
According to Burry, “Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time.” The investor also highlighted the potential dilution of shares due to Musk’s $1 trillion compensation package. He added a sharp observation about Tesla’s approach to innovation: “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up.”
This is not Burry’s first public critique of Tesla. In 2021, he took a $530 million short position against the company’s shares but exited the trade within a few months, describing it as “just a trade” to CNBC.
Broader Tech Criticism
Tesla is not the only tech company under Burry’s scrutiny. The investor, famously portrayed in The Big Short for his bet against the housing market, has also expressed concerns about a potential bubble in artificial intelligence. Last month, he disclosed positions against Nvidia and Palantir, sparking public debates with both companies.
Burry recently deregistered his hedge fund and launched his Substack, signaling a shift toward more public commentary on market trends rather than traditional fund management.
Tesla’s Market Performance
Despite criticism, Tesla’s stock has shown resilience. The shares are up 11% in 2025, buoyed by investor enthusiasm around the company’s robotaxi program. The EV maker continues to maintain a significant share of the U.S. electric vehicle market, holding roughly 41% as of August, although this represents a gradual decline as competitors introduce new models.
Musk’s Ambitious Plans
Elon Musk has consistently defended Tesla against critics and short sellers. He predicts that the company will become the world’s most valuable, citing its long-term vision. The recently approved $1 trillion compensation package for Musk is contingent on Tesla achieving a market capitalization of $8.5 trillion over the next decade, nearly double that of Nvidia.
Musk has emphasized the company’s focus on innovation beyond electric vehicles. Tesla’s robotaxi initiative and the Optimus robot project are central to its future plans. However, these ventures face increasing competition from companies such as Google-backed Waymo and Chinese robotics startup Unitree.
Industry Perspectives
Tesla’s stock is currently trading at over 250 times its earnings, a valuation multiple significantly higher than traditional automakers. Burry is not alone in his concerns; famed short-seller Jim Chanos also labeled Tesla as overvalued in 2023.
The investor’s criticism comes amid ongoing debates about the sustainability of Tesla’s market dominance and whether Musk’s futuristic projects can maintain investor confidence. While the company remains a leader in the U.S. EV market, the rise of competitors has introduced new pressures.
The coming years will be critical for Tesla as it seeks to maintain market share while expanding into robotics and autonomous transportation. Analysts and investors alike are watching the company’s ability to innovate and execute on Musk’s ambitious vision.
Burry’s recent commentary adds to the growing conversation about the balance between Tesla’s current valuation and its potential long-term prospects. Whether the market continues to embrace Musk’s futuristic roadmap or adjusts expectations remains a key point of interest for industry observers.
