It’s no secret former General Motors executive, and self-proclaimed car guy, Bob Lutz, is no fan of Tesla. However, amid a roaring company value and climbing stock prices, he returned to CNBC to discuss why he thinks Tesla is ultimately doomed and operates under a “flawed business model.”
“How in the world is he going to make money on a $35,000 small car?” asked Lutz, referring to the more affordable, upcoming Model 3 sedan. “The cost of a car does not come down proportionally to price.”
Lutz goes on to say if Tesla cannot make money on its most expensive vehicles, it’s a poor outlook for any future endeavors. But what about Tesla’s in-home batteries and solar roofs? Lutz doesn’t buy it either.
“I think they’re doomed,” he said.
“Elon Musk is the greatest salesman in the world. He paints this vision of an unlimited future, aided and abetted by some analysts,” Lutz said. “It’s like Elon Musk has been beamed down from another planet to show us mortals how to run a company.”
Meanwhile, GM CEO Mary Barra was praised for her efforts in injecting quality, safety and discipline into the automaker. Panelists agreed GM’s stock is grossly undervalued.