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Former GM Exec Bob Lutz Says Tesla Is ‘Finally Being Run Like A Normal Business’

Former General Motors executive and automotive industry mainstay Bob Lutz has been an outspoken critic of Elon Musk and Tesla. He previously called the Tesla Model Y crossover “terminally ugly,” and said the company would eventually go bankrupt as legacy automakers release their own EVs and drive down demand for vehicles like the Model S and Model 3. He also urged Tesla to fire Elon Musk due to his “unpredictable” behaviour in a 2018 op-ed for Road & Track, accusing him of steering the company toward a proverbial iceberg at “flank speed.”

Elon Musk

Lutz seems to be warming up to Musk and his wildly popular electric vehicle company, though. Appearing on CNBC’s Squawk on the Street program this week, Lutz said Tesla “is finally being run like a normal business,” after reducing its overhead spending with a number of cost-cutting measures.

″[Musk] finally reined in his costs,” Lutz said. “He’s reduced personnel and reduced unnecessary expenditures and has basically done what any other businessman would do in a situation where you’re selling a bunch of stuff but you’re not profitable.”

Lutz also praised Musk for the recent opening of Tesla’s new plant in Shanghai, China, which will allow the automaker to sell more vehicles in China and at a more competitive price.  He said the company has “achieved a volume break through, with the plant in China opening and selling a lot of Model 3s.” He also noted that many Model 3s are selling for much more than the $35,000 base price Musk had touted the car with, as options are often driving the price of the vehicle to over $50,000 and sometimes close to $60,000.

“As long as they can keep that premium pricing, which is as I say about $33,000 over where they had originally talked about, obviously that car is going to be profitable,” Lutz said.

Bob Lutz

As for Elon himself, Lutz said he has been more focused on the job at hand recently, refraining from publishing controversial tweets or making lofty claims in the media and instead staying focused on fixing Tesla’s shortcomings.

“He has been quite adept,” Lutz said. “The encouraging thing to me about Tesla is from Elon there is less talk, less bluster. He is focusing on the business, focusing on the product and focusing on cost control.”

The next few years will be important for Tesla, with the automaker set to face some of its stiffest competition yet in the way of new products from well-funded EV startup Rivian and legacy automakers like General Motors and Ford, as well. The company will release its Model Y crossover this year before turning its attention to the Cybertruck, which will start rolling off production lines sometime in 2021.

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Source: CNBC

Sam loves to write and has a passion for auto racing, karting and performance driving of all types.

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Comments

  1. Now they just need to fix there “terminally Ugly” as Lutz calls them vehicles like the Cyber truck.

    Reply
  2. I like Bob Lutz, and what he tried to do at Cadillac, but him saying Tesla is now being run as a company should, to me, is a, Ha !

    All the time Elon was saying he needed to SPEND MONEY to get thing going, and SPEND MONEY on development, GM and on this site for sure, were saying just the opposite.

    He will go broke !
    His stocks will crash !
    He is crazy, this is my favorite, as I have been called crazy here by some !

    Yet Bob sat there and watched GM cheapen out their products and FOR SURE his very own Cadillac products, almost to failure. And that is still yet to be seen !

    Sure there needs to be cost considerations in EVERY BUSINESS, and Bob of all people know this.

    But what Bob and a lot of others here do NOT get, is the way a company WAS run, does NOT mean it is how one should be run today !
    He of all people, knows you need to spend money, and constantly change to compete. And today more than ever !

    So as GM was spending money paying the top 5, and all the billions to the top 5 and dividends to just KEEP invested dollars.
    Elon was getting people to invest because they see something they want to see.

    How does paying out your profit to NON PRODUCT investment, while your product is loosing market share, the right way to run a business ?

    I still say, its like a trucker buying new wheels, yet not buying new tires !!!!!! Sure its OK to buy the wheels, after you buy the tires you need to run the truck !

    Elon has been buying new tires and wearing them out and buying new tires and wearing them out and buying new tires and wearing them out, and is just now starting to think of those new wheels !

    While GM is buying those new wheels and buying those new wheels and buying those new wheels, and now need new tires, and just cant seem to buy them !

    Bob of ALL people should know what REINVESTMENT looks like. You need to reinvest your ” could be ” profit, yet then you do not show a profit !
    Yet if you show a profit just to spend it on wheels, sure you showed a profit, yet now you need those tires !

    Reply
    1. @LifelongGMowner
      I have been stating here for the last couple of years that GM and other Legacy Auto Makers didn’t take Elon and Tesla seriously and are now paying the Price for it.
      I have always stated that I refuse to bet against a person that figured out how to launch, land, and then reuse Rockets. Not even NASA which has been around for over 50 years has done so.
      So to think he won’t figure out how to build cars was always comical to me. Tesla has without a Doubt become the Apple of the Automotive World. Now everyone is left scrambling to at least obtain that so called Google spot.
      Nobody understood Amazon either. Look at them now.
      Elon had a vision and so far has exceeded it. His Company is Disrupting all sorts of Trillion Dollar Industries.
      Look at how many EV startup companies are popping up everywhere.
      Mr. Lutz is a Living Legend of Auto Personalities but he embarrassed himself quite badly the last couple of years with Tesla. I am glad he is at least admitting it now.
      Hope GM steps up their EV Game soon.

      Reply
  3. Bob Lutz is finally admitting just how totally and embarrassingly wrong he and all the Shorts were on Tesla huh?
    His take on Tesla the last couple of years really ruined his amazing Legacy. His Predictions went down like a Led Zeppelin. I am not sure and this is just a Theory on my part (again completely my own opinion) Lutz is either heavily invested in Big Oil or is silent that he is a Tesla Short Seller.

    Reply
  4. I subscribe to all of the car magazines. For years now, It’s been Tesla this and Tesla that. Here in financially downtrodden former GM Dayton, Ohio, I’m lucky to see one Tesla on the road per month. So, I don’t get it.

    Reply
    1. Dave H.
      That’s because its financially downtrodden.

      Where I live, in SD, its the same. There are 3 or 4 running around.

      But if you could get out in the real world, the world of today, and not be secluded in the 1970s you would quickly see Tesla is reaping !!

      Shooting cars into space, updating cars on the fly, landing rockets on a ship, taking supplies to the space station, building a rocket to try to go to Mars !

      GM is still trying to figure out how to keep a back window from leaking and how to make a transmission shift !!

      ————————-AFTER 100 YEARS ————————

      Reply
      1. LifelongGMowner
        Everything you say Elon has done is true. But on a very minute scale. Even still saddled with union and legacy costs, GM still sold 2.9 million cars in 2019. People who can only afford new cars under$40k are not just the majority, they are the EXTREME majority. And I do mean buy, not rent (lease). THAT is the real world. I actually hope Tesla is able to go big, I just don’t see it happening in my lifetime (I’m 66) And, I also still think if GM can get their union and legacy costs put away like the Asians, they would still be a force to be reckoned with.

        Reply
        1. David H,
          With all do respect of your 66 ness, A very minute scale, WHAT !!!!

          GM has a hard time making a transmission shift in the year 2019 after 100 years to prefect it.

          Elon Musk lands a rocket on a ship and sells 367,200 vehicles, and has 2 brand new factories, and makes his own batteries and sends his own satellites to space, and on and on !

          Will GM forever have an excuse ?
          Legacy this !
          Union that !
          Everything you are using as an excuse , for GM was created by GM !
          They were ALL business decisions once made by GM !!!!
          There is no one else here to blame !!
          And will Elon get a do over bankruptcy like GM ?
          And when you say GM sold vehicles not leased, is that true ?
          GM outright sold 2.9 million vehicles to owners driving those vehicles ?
          Are you sure that’s not sold to dealers sitting on dealer lots ?
          Just the value of Tesla is more than Ford and GM combined, and that’s not Space X, or any other Elon Companies !
          You see what happened with Amazon – right ?
          You see what happened with Microsoft – right ?
          You see what happened with Apple – right ?
          You must have a computer as you type here, and that’s great for a 66 year old. Most where I live do not, and most here do not even have smart phones.

          So again GM is over 111 years old !
          Tesla is 16 years old !

          I agree with you that GM is outselling Tesla to the majority !

          But Tesla has 95 years to catch up, plus a tax payer bailout !

          I’m still not getting you when you say you hope Tesla is able to go big ?
          Again Tesla as a company is worth more than GM and Ford combined, please explain what a big company is in your mind, the biggest square footage ?
          Isn’t that how the US ranks businesses size, by worth ?

          Any way have a good evening sir.

          Reply
  5. There is not one model of Tesla ever built that I thought was nice looking , however this truck is by far the worst looking design I had ever seen in any vehicle….I simply can’t even look at it!
    To me It looks like a 4 year old sketched it with a crayon and Tesla decided to go with it.

    I am a seasoned truck buyer and if this truck did everything perfect…I still would’t take it for Free!

    Reply
  6. Now that Tesla has a market capitalization (net worth) equal to Ford and GM combined, Lutz has clearly lost his arguments.

    The truth of the matter is that Ford and GM are shrinking rapidly while Tesla is growing. So the financial community values the Detroit boys at nearly nothing in the long-term. When you’re shrinking, you’re dying.

    Reply
    1. Yep !!!

      Reply
  7. That’s one Ugly vehicle so is their pickup truck.

    Reply

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