Tesla is an “automobile company that is headed for the graveyard,” as it doesn’t have any advantage over the scores of electric vehicles coming from the legacy automakers and can’t recoup EV sales losses with sales of gas-fired cars, General Motors’s former vice chairman Bob Lutz told CNBC on Tuesday.
Lutz continues to believe that Tesla Model 3 will never make money because overhead costs are widely exceeding the profits from making fewer than 150,000 cars a year.
In addition, the competition coming from the German automakers Audi, Mercedes-Benz, and BMW, as well as from GM in the United States, will put additional pressure on Tesla, Lutz said.
“Tesla has no … tech advantage, no software advantage, no battery advantage. No advantages whatsoever,” Lutz told CNBC’s program Closing Bell.
Some would argue, however, that Tesla’s main advantage is Elon Musk, but his recently questionable Twitter activity even calls this advantage into question.
While legacy car makers can afford to sell EVs at a loss and recoup those losses with sales of internal combustion engine (ICE) vehicles, which still are the preferred choice in America, Tesla doesn’t have ICE sales on which to recoup EV losses, Lutz said, adding that “unless they’ve got some source of money somewhere, it’s going to be a big problem.”
“The jaws are tightening and I think in another year or two we’ll see a movie called ‘Who Killed Tesla,’ a conspiracy movie starring Leonardo DiCaprio,” Lutz told CNBC.
The comments from the former GM executive, who has been warning about Tesla going belly up for a few years now, came on the day on which a Bloomberg report said that Tesla was under criminal investigation by the U.S. Department of Justice for Elon Musk’s claims on Twitter that he was taking Tesla private, with “funding secured”.
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Musk backtracked on that proposal two weeks later, but the tweets had already triggered an SEC probe into Tesla and Musk about the “funding secured” claim.
Tesla said on Tuesday that:
“Last month, following Elon’s announcement that he was considering taking the company private, Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it.”
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By Tsvetana Paraskova for Oilprice.com
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What a pile of garbage. Wrong from the top to the bottom.
On the verge of record sales and PROFITS.
Competition is close but can only do limited production due to batteries.
10M EV production means you need over 400,000 chargers.
GM tried and failed badly,
Vilas capital had immediate death of Tesla at the end of March. That made the rounds. Tesla was "dead" when the Model S first came out....
Bobby Nutz is embarrassed that Tesla cars are beating his GM cars.
Tesla will beat Porsche in sales. Beating GM's Bolt and Volt like 10X and more.
A few points:
- The next few weeks, I am sure, will show Tesla well on the way to making solid profits.
- Tesla do not need to sell cars at a loss, because their gross margin on each car is over 20%.
- They have already passed the likes of Porsche and Jaguar Land Rover in terms of TOTAL annual production and are easily outselling BMW, Audi, Lexus, etc. in their (Tesla's) key market, the USA
One might ask: If Tesla has no technological, battery, or other advantage, how come they are building and selling c.12,000 Model 3's per month in the U.S, whilst GM's supposed 'Tesla-killer', the Chevy Bolt, currently sells around 1,000. The Bolt entered production several months before the M3, and is also cheaper, I believe - but we never seem to hear of 'struggling' GM being in 'production hell' in an effort to meet demand.