Prominent short seller Jim Chanos said Monday that he is still betting on Tesla as competition in the electric vehicle market intensifies. “I just think it’s really options right now that are going up,” Chanos said on CNBC’s “Fast Money” in Miami on Monday. “The bears were wrong when it came to competition. It took a long time to show up, but I don’t think they’re wrong now. I think the competition is on the rise.” Founder of Chanos & Co. said investors often forget that the automaker made a loss throughout 2019 when it made cars in the US, and it wasn’t until Tesla opened a factory in Shanghai that its profits increased. However, China is currently Tesla’s weakest market, Chanos said. “You’re in a cyclical business and his margins, which peaked in their 20s, are now geared toward young people as high as they were before they opened up China,” Chanos said of the maker. electric car run by Elon Musk. Tesla’s December sales of Chinese-made cars fell to a five-month low in December as most production at its Shanghai factory was suspended due to production line upgrades. . Short sellers have been betting and trading around EV players for several years. The stock lost 65% last year as rates rose and Musk’s $44 billion acquisition of Twitter, but it’s rebounded 35% this year alone. “They’re struggling with some issues, and the stock remains at a market cap of nearly $550 billion and is currently trading at 20x gross margin,” Chanos said. “It trades high… actually trades higher in terms of its multiples to Ferrari and Porsche.” Chanos said Tesla has a large footprint in China, generating a significant amount of profit in the developing country. And that is also the source of many risks, he said. “You have capital risk. You have BYD and the others just have a big market share,” Chanos said. “Tesla trades at a premium to companies that are growing faster than they are in China. So if you want to play all of this, there’s a lot of ways to do it now.” Tesla has a number of challenges in China, including a host of startups like Nio, Xpeng and Li Auto. Its biggest rival in China right now is BYD. The company also lowered the prices of its cars in China in 2022, amid a difficult macroeconomic environment and weak consumer demand.