Carson Block, a known Tesla (NASDAQ: TSLA) critic and an activist short-seller who runs the investment research firm Muddy Waters Capital, admitted in a letter to shareholders that he was wrong about Elon Musk and his EV company.

“Haven’t I publicly called Elon a “liar” and railed against his lies and cheating? Yes, but let me digress for a moment,” Block wrote in a letter, before continuing:

“To be fair to myself, I was telling people as early as 2013 that I wouldn’t short Elon Musk. My saying at the time was “Whether you want to go long him or not is a different question, but he is way too skilled at pulling rabbits out of the hat to short.”

Block also said that his company was long TSLA bonds, and had used the coupons to buy long-dated deep out-of-the-money (OTM) puts, which “came tantalizingly close to paying off in 2019, but Elon pulled the requisite rabbits out of the hat, the Fed loosened in response to Covid, and our puts went to Put Heaven,” Block explained.

The short-seller goes on to say he is now less hostile to Musk as he “demonstrated the viability of EVs with the Model S and has built rockets that really do innovate and work.”

“I disdained his incessant bullshit. I felt it was an unnecessary stain on his legacy,” he said before adding that “Tesla shorts have been right and wrong all along about Tesla’s problem.”

In an interview with CNBC back in 2019, Block said there’s a “global war against truth.”

“There are millions of people, presumably, that think we should apply a double standard to Elon Musk because he is at least claiming to save the planet.”

On Tesla, he further added:

“At the end of the day, just don’t think that the company is ever going to achieve the kind of scale necessary to be able to compete with the competition that is coming on line in electric vehicles.”

Around the same time as that CNBC interview, Block argued in a Forbes column that Musk should take Tesla and list the company’s shares in Germany.

“Elon probably isn’t aware that in Germany he can have regulatory carte blanche, and can tweet anything he wants with no retribution – no matter how fraudulent. Moreover, short sellers and press critics would likely be investigated the moment they speak out. Call that hyperbole, but these days German regulators don’t seem to care much about corporate fraud - in fact they’re acting more like Russia and China in trying to shoot any messengers who dare criticize a German company,” Block wrote.

Back to his latest letter to shareholders, Block revisits his theory that Tesla can’t compete with bigger car players.

“[Critics] are correct in that lack of scale would have been the death of Tesla. But they were looking at the wrong scale. Tesla is here not because it has scale in terms of manufacturing base or unit sales. It has scale because of its capital base. At the end of the day, for someone who can actually make the fucking car drive and the rocket fly, that is all that matters. All those years of lying (e.g., “funding secured”), wars with short sellers that we assumed were driven only by his pathological narcissism, and trampling rules he found inconvenient have given Tesla capital base scale. With Tesla having an enterprise value of ~$700 billion, it has far more capital scale than any competitor.”

For Tesla to keep scaling, Block argues, it doesn’t have to sell as many cars as Toyota but it “requires Elon to continue setting his audience’s receptivity level of bullshit to Absurdly – if not Adoringly – Accepting.”

“Might he fail? Maybe,” he concludes.

Tesla share price is up over 140% compared to March 2019, when Block talked to CNBC and Forbes.