Former General Motors Vice Chairman, Bob Lutz, has been an outspoken critic of Tesla for years, but he’s intensified the rhetoric in his latest appearance.
Lutz told CNBC the electric-car maker is an automobile company “headed for the graveyard.”
“They will never make money on the Model 3 because the cost is way too high. He’s got 9,000 people in that assembly plant producing less than 150,000 cars a year. The whole thing just doesn’t compute. It’s an automobile company that is headed for the graveyard,” he said.
The former GM executive has previously predicted Tesla’s demise and called out its funky operations for bleeding cash and its mismanaged strategy. Tesla has yet to turn a profit since it began producing the more affordable Model 3 electric car. And CEO Elon Musk has had a rough year attempting to manage bottlenecks and most recently a Department of Justice investigation.
A Bloomberg report claimed the DOJ has opened an investigation into Tesla and Musk over his “funding secured” tweets last August. Musk tweeted he was considering taking his company private at $420 per share and he had the funding locked in to make such a move. Ultimately, Tesla remained a public company.
However, the DOJ will investigate any criminal wrongdoing in the in the way Musk handled the announcement of sorts. The criminal investigation follows inquiries from the SEC as it explores the possibility of trade violations. The company is also facing multiple lawsuits alleging Tesla attempted to manipulate its stock price to harm short sellers.
Lutz added the criminal investigation means the SEC will not allow Tesla to initiate a capital raise, either, which many analysts have said seems necessary as the company continues to lose millions of dollars.
“Tesla has no … tech advantage, no software advantage, no battery advantage. No advantages whatsoever,” he said.