Tesla short-seller David Einhorn warns Elon Musk's last quarter was its peak


Hedge fund manager David Einhorn also owns a minority stake in the New York Mets baseball team (Source: Getty)

One of Tesla's most outspoken short-sellers David Einhorn has said its most recent third quarter was "as good as it gets", spurning theories that the electric carmaker had reached a turning point.

Einhorn, whose hedge fund Greenlight Capital has consistently shorted Tesla's shares, said in an earnings call this afternoon that Tesla had "exhausted" most of the customer demand for its higher-priced Model 3 sedan.

"We believe this will be as good as it gets for the company," he told analysts.

"While Tesla expects to make 65,000 Model 3s in the fourth quarter, we believe they have exhausted most of the demand from customers who can afford the highest price versions of the Model 3."

He also highlighted Tesla's recent legal and production woes, adding: "Tesla is contending with a litany of competitive, regulatory, human resources, vehicle quality and capital structure issues."

His comments come despite Tesla making its first quarterly profit in two years last month, despite consensus estimates predicting that profitability would not come until 2019.

Throughout 2018, Tesla chief executive Elon Musk has been burning through cash as he ramped up Model 3 production to meet his high expectations. In July, the company was forced to dismiss nine per cent of its salaried, non-production workforce in order to free up capital. 

Additionally, Tesla and Musk both received $20m (£15.3m) fines from the US securities watchdog in September, after Musk tweeted plans to take the company private with "funding secured".

It later transpired he had not secured any funding, nor had he sufficiently informed Tesla's board or the relevant authorities for such a deal.

There has been no love lost between Musk and Einhorn to date, with the Tesla billionaire sending him “a box of short shorts” in August.

Tesla’s share price rose more than one per cent after the comments.