Tesla is an “automobile company that is headed for the graveyard,” as it doesn’t have any advantage over the scores of electric vehicles coming from the legacy automakers and can’t recoup EV sales losses with sales of gas-fired cars, General Motors’s former vice chairman Bob Lutz told CNBC on Tuesday.
Lutz continues to believe that Tesla Model 3 will never make money because overhead costs are widely exceeding the profits from making fewer than 150,000 cars a year.
In addition, the competition coming from the German automakers Audi, Mercedes-Benz, and BMW, as well as from GM in the United States, will put additional pressure on Tesla, Lutz said.
“Tesla has no … tech advantage, no software advantage, no battery advantage. No advantages whatsoever,” Lutz told CNBC’s program Closing Bell.
Some would argue, however, that Tesla’s main advantage is Elon Musk, but his recently questionable Twitter activity even calls this advantage into question.
While legacy car makers can afford to sell EVs at a loss and recoup those losses with sales of internal combustion engine (ICE) vehicles, which still are the preferred choice in America, Tesla doesn’t have ICE sales on which to recoup EV losses, Lutz said, adding that “unless they’ve got some source of money somewhere, it’s going to be a big problem.”
“The jaws are tightening and I think in another year or two we’ll see a movie called ‘Who Killed Tesla,’ a conspiracy movie starring Leonardo DiCaprio,” Lutz told CNBC.
The comments from the former GM executive, who has been warning about Tesla going belly up for a few years now, came on the day on which a Bloomberg report said that Tesla was under criminal investigation by the U.S. Department of Justice for Elon Musk’s claims on Twitter that he was taking Tesla private, with “funding secured”.
Musk backtracked on that proposal two weeks later, but the tweets had already triggered an SEC probe into Tesla and Musk about the “funding secured” claim.
Tesla said on Tuesday that:
“Last month, following Elon’s announcement that he was considering taking the company private, Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it.”