Bob Lutz has once again voiced concerns over Tesla’s strategy and overall business model, following his statements on the automotive company “bleeding cash” and facing an overall “trifecta of doom.”
This time, Lutz called out the Tesla’s latest production vehicle, the Model X, for possessing little sustainability in the long run.
“While [Tesla’s] car is excellent, the business has always been lousy. Now, it’s super lousy because the generic demand for electric vehicles is down. And here’s why this is going to kill Tesla: whether there’s consumer demand for electric vehicles out there or not, the major OEMs like Ford, GM, Toyota, Volkswagen…they have to build electric cars — a certain number — in order to satisfy the requirements in about half of the states.
Those have to be jammed into the marketplace, otherwise they can no longer sell SUVs and full-size pickups and the stuff they really make money on. That is going to generically depress the prices of electric vehicles,” he said in his latest CNBC interview.
The father of the Chevrolet Volt ultimately criticized the struggling business model finally stating, “Tesla’s business model is upside down…their costs have always been higher than their revenue – they always have to get more capital, then they burn through it.” His words come after the futuristic gullwing-style doors on the Model X have come under fire for not working properly.
Lutz remained pessimistic on the overall electric car industry in general, once again reiterating there is no way the 2017 Chevrolet Bolt EV will help General Motors turn a profit. Instead, it’s a strategy play to continue selling the gasoline-guzzling trucks and SUVs for high profit.
“Look at the new GM Chevy Bolt, which after federal incentives costs roughly $30,000. GM is not going to make money on that. But the majors are going to accept the losses on the electric vehicles as a necessary cost of doing business in order to sell the big gasoline stuff.”
Lutz isn’t the only nay-sayer when it comes to Tesla, though. Cadillac CMO, Uwe Ellinghaus, has previously stated he thinks the automaker’s competitive advantage is no longer. As more automakers join the EV field, electrification will simply become an option consumers may check off.
Are they right? Talk to us about the situation in the comment section below.