Kynikos Associates founder Jim Chanos (Trades, Portfolio) has been a very vocal critic of electric car manufacturer Tesla Inc. (NASDAQ:TSLA), as well as its celebrity CEO Elon Musk, over the last five years. Since October 2019, Tesla's stock has more than quadrupled in price, and as of writing, the business has a $186 billion market capitalization and is trading at more than $1,000 a share. Despite this, Chanos is still as bearish as ever on the company. He discussed his thesis in a recent interview with Bloomberg.

A barometer for the market

Few stocks inspire such heated debate between bulls and bears like Tesla. Bulls view it like a tech growth stock, whereas bears like Chanos see it as an overpriced automaker whose biggest growth period is behind it. And it’s not difficult to see why he holds this view: Tesla has very similar profit margins and returns on capital to other automobile original equipment manufacturers and is not at all similar to tech companies like Google (NASDAQ:GOOG) or Facebook (NASDAQ:FB). Meanwhile, the company’s revenues - after this quarter - will have been essentially flat for six consecutive quarters, which somewhat undermines the growth argument as well.Warning! GuruFocus has detected 8 Warning Signs with TSLA. Click here to check it out.TSLA 30-Year Financial DataThe intrinsic value of TSLAPeter Lynch Chart of TSLA

But the real core of Chanos’ argument comes down to valuation:

“This is a company trading now at an almost $200 billion total enterprise value, so it's trading at 8 times revenue. Most of the other automakers trade between 0.25 times and 0.5 times revenue. So this is really totally a perception by the market that there is some cutting edge technology here. The problem is that what everyone is excited about - whether it’s batteries or autonomy - Tesla’s not a market leader: Panasonic makes its batteries, the new ‘superbatteries’ out of China are made by a company called CATL. Audi in its A8 [model] has level 3 autonomy, while Tesla is still at level 2...Tesla is a wonderful barometer for where people’s views are on speculation, because people see it the way they want to see it. The product at Tesla that has always been first-rate is the narrative.”

Chanos, who recently booked big profits on his short against German payment company Wirecard (XTER:WDI), added that he has plenty of questions about Tesla’s financial statements too, specifically in connection with the 2016 acquisition of SolarCity, another Musk business. Tesla is currently in the midst in a class-action lawsuit concerning the manner in which the takeover was carried out.

Musk claimed that SolarCity’s solar roof tile technology would synergize well with Tesla, using this argument to drum up support for the merger. It was later disclosed that this technology did not exist and, as of June, Tesla is cancelling customer orders for the solar tiles.

Chanos has been on a roll the last few months with bets against Wirecard and Hertz (NYSE:HTZ) paying off handsomely, but if he ends up being right on Tesla, that will be his biggest headline in a while.

Disclosure: The author owns no stocks mentioned.

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Stepan Lavrouk Stepan Lavrouk is a financial writer with a background in equity research and macro trading. Specific investing interests include energy, fundamental geoeconomic analysis and biotechnology. He holds a bachelor of science degree from Trinity College Dublin.