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.”
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.
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.