Tesla Faces Mounting Pressure as Sales Slump and Vision Falters

The celebrated investor Michael Burry, who famously bet against the U.S. housing market before the 2008 financial crisis, has once again taken a bearish position against Tesla. With the company’s shares trading at elevated levels, Burry has labeled the electric vehicle maker as “ridiculously overvalued.” This criticism arrives alongside a series of concerning developments for the automaker, including a severe downturn in European sales and a significant admission from CEO Elon Musk regarding the company’s autonomous driving ambitions. These converging factors raise serious questions about whether Tesla’s market valuation is due for a major correction.

European Sales Collapse Undermines Growth Narrative

Recently released vehicle registration data for November paints a stark picture of Tesla’s performance in key European markets. On a year-over-year basis, the company experienced a dramatic plunge in new registrations. The figures show a 58 percent drop in France, a 59 percent decline in Sweden, a 49 percent fall in Denmark, and a 44 percent decrease in the Netherlands.

Norway presented a notable exception, where sales nearly tripled. However, market analysts attribute this surge not to organic demand but to anticipatory buying ahead of a planned tax increase on electric vehicles set for 2026. This anomaly does little to offset the broad-based weakness seen across Tesla’s core European territories. The stark contrast between this operational reality and the company’s current stock market valuation is becoming increasingly difficult to ignore.

Musk Concedes Failure on Full Self-Driving Forecasts

In a more fundamental blow to the investment thesis, CEO Elon Musk has publicly acknowledged that his repeated predictions about the rollout and adoption of Tesla’s Full Self-Driving (FSD) technology were incorrect. Contrary to Musk’s earlier expectations, other major automotive manufacturers have shown no interest in licensing the FSD system from Tesla.

Should investors sell immediately? Or is it worth buying Tesla?

This leaves Tesla isolated with its “Supervised” beta system, while competitors like Mercedes-Benz advance their own approved autonomous driving technologies. The vision of FSD becoming a high-margin software revenue stream—a central pillar of the bullish argument for Tesla’s premium valuation—has effectively crumbled. Instead of creating a lucrative new business line, the technology remains an in-house project with unfulfilled commercial potential.

Valuation Diverges From Operational Reality

As Tesla’s stock hovers around $430, a growing list of negative developments is widening the gap between its share price and its fundamental business performance. Burry’s renewed short position, the European sales collapse, and the admitted setbacks in autonomous driving collectively challenge the narrative of corporate “perfection” that appears to be priced into the equity.

Burry, whose foresight in 2008 earned him legendary status, argues that Tesla’s valuation has detached from any reasonable fundamental basis. He suggests that what he terms the “Elon cult” consistently shifts investor focus to new, futuristic themes—from cars to autonomous driving to robotics—whenever competitive pressures intensify in the company’s core automotive business. This cycle, he implies, distracts from deteriorating fundamentals in the present.