Michael Burry, the legendary investor known for his role in The Big Short, is taking aim at another tech giant: Tesla. In a Substack post published Sunday evening, Burry called Tesla “ridiculously overvalued,” criticizing Elon Musk’s $1 trillion pay package for further diluting shareholder value.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry wrote. He added a pointed critique of Musk’s ventures: “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.
Who Is Michael Burry?
Michael Burry is a hedge fund manager and investor who gained international fame for predicting the 2008 housing market collapse. His story was immortalized in the hit movie The Big Short, where he foresaw the subprime mortgage crisis and profited handsomely.
Known for his contrarian investing approach, Burry often targets overhyped assets and bubbles before the market corrects itself. Over the years, he has turned his attention to various tech giants, most recently Tesla, Nvidia, and Palantir, positioning himself as a voice of caution in a market driven by hype and speculation.
Burry has a history of shorting Tesla. In 2021, he placed a $530 million bet against the company but exited the position within months, calling it “just a trade” to CNBC.
Tesla has not responded to requests for comment regarding Burry’s latest post.
This latest criticism comes amid a broader pattern: Burry has recently disclosed bets against Nvidia and Palantir, openly criticizing the current AI boom as a potential bubble. In November, he deregistered his hedge fund and launched his Substack to share insights directly with readers.
Tesla is not alone in facing valuation concerns. Its shares trade at more than 250 times earnings, and famed short-seller Jim Chanos has also labeled the stock overvalued.
Despite skepticism, Tesla shares have climbed 11% in 2025, buoyed by optimism over its robotaxi rollout. Musk continues to defend the company, aiming to make Tesla the world’s most valuable firm. The billionaire’s $1 trillion pay package, approved last month, hinges on Tesla reaching an $8.5 trillion market cap within the next decade nearly double Nvidia’s valuation.
Tesla maintains a strong position in the U.S. EV market, holding a 41% market share as of August, though competition from other electric carmakers has grown. Musk continues to emphasize Tesla’s future in robotaxis and robotics, while facing rivals such as Google-backed Waymo and Chinese robotics startup Unitree.
Michael Burry’s History with Tesla
Burry’s criticism of Tesla is not new. In 2021, he placed a $530 million bet against Tesla shares but exited the position after a few months, describing the move as “just a trade” in an interview with CNBC.
Despite stepping back at that time, Burry has continued monitoring Tesla closely, particularly as Elon Musk expands the company into new technology sectors.
Tesla’s Market Valuation and Investor Concerns
Tesla’s stock valuation remains a hot topic among investors. Currently, Tesla shares trade at over 250 times earnings, significantly higher than those of traditional automakers. High-profile investors, including short-seller Jim Chanos, have also labeled the stock as overvalued, echoing Burry’s concerns.
While Tesla continues to dominate the U.S. EV market with around 41% market share, competition is intensifying as established automakers and startups introduce new electric vehicles. Burry’s warning underscores the risk of investing in Tesla at its current valuation, especially for long-term investors.
Elon Musk’s Response to Critics
Elon Musk has been vocal in defending Tesla and dismissing short-sellers’ warnings. Despite a DOGE-related stock wobble earlier in 2025, Tesla shares have risen 11% this year, largely driven by optimism around the company’s robotaxi rollout.
Musk has emphasized that Tesla’s future lies in autonomous vehicles and robotics. His ambitious $1 trillion pay package, approved by Tesla shareholders, is tied to achieving a market cap of $8.5 trillion over the next decade, nearly double Nvidia’s current valuation. Musk believes these innovations will secure Tesla’s dominance in both the EV and tech industries.
Michael Burry and the AI Bubble
Burry’s warnings are not limited to Tesla. He has also expressed skepticism about the current AI boom, labeling it a potential bubble. Recently, he disclosed bets against Nvidia and Palantir, two companies at the forefront of AI and data analytics, engaging in public debates over their valuations.
His cautious stance reflects a broader concern: the market may be overvaluing tech companies based on hype rather than sustainable growth metrics. Tesla, with its sky-high valuation and aggressive expansion plans, is a prime example of this trend.
Tesla’s Growth vs. Competition
Tesla continues to innovate, but competition is growing. The company faces challenges in multiple areas:
- EV Market: Rivals like Ford and GM, as well as new entrants, are releasing more electric vehicles, gradually eroding Tesla’s market share.
- Autonomous Driving: Companies such as Google-backed Waymo are making significant strides in self-driving technology.
- Robotics: Tesla’s Optimus robot faces competition from Chinese startup Unitree and other tech companies investing heavily in robotics.
Frequently Asked Questions
Who is Michael Burry?
Michael Burry is a renowned investor and hedge fund manager, famous for predicting the 2008 housing market crash. He gained international recognition for his role in The Big Short. Burry is known for his contrarian investment strategies, often targeting overvalued assets.
Why does Michael Burry say Tesla is overvalued?
Burry called Tesla “ridiculously overvalued” due to its sky-high market capitalization, currently over 250 times earnings. He also cited Elon Musk’s $1 trillion pay package as a factor that could dilute shareholder value.
Has Michael Burry invested against Tesla before?
Yes, in 2021, Burry placed a $530 million bet against Tesla shares but exited the position within months, calling it “just a trade.” He has continued to monitor Tesla’s valuation and growth prospects.
What are Elon Musk’s plans for Tesla?
Elon Musk aims to expand Tesla beyond electric vehicles into autonomous driving and robotics. His $1 trillion pay package depends on Tesla achieving an $8.5 trillion market cap within the next decade, highlighting his ambitious growth targets.
How has Tesla’s stock performed despite Burry’s warning?
Tesla shares have risen 11% in 2025, boosted by optimism over the company’s robotaxi rollout and continued dominance in the U.S. EV market, which holds around 41% market share as of August.
What does this warning mean for Tesla investors?
Burry’s warning signals potential valuation risks for Tesla investors. High stock prices, increased competition, and shareholder dilution could impact long-term returns, making careful evaluation essential before investing.
Conclusion
Michael Burry’s warning that Tesla is ‘ridiculously overvalued’ serves as a critical reminder for investors to carefully evaluate high-flying stocks. As the legendary Big Short investor highlights, Tesla’s sky-high valuation, Elon Musk’s $1 trillion pay package, and growing competition in the EV, autonomous driving, and robotics sectors could pose significant risks to shareholders.
While Tesla continues to lead in innovation and maintain a strong U.S. market presence, Burry’s bold prediction underscores the importance of balancing optimism with caution. For investors, this is a call to assess whether Tesla’s current market price truly reflects its long-term growth potential or if the hype has pushed the stock beyond sustainable value.