Former General Motors vice chairman, Bob Lutz, has cast doubt on the future prospects of electric car maker Tesla amid mounting financial losses. Photo / AP
Former General Motors vice chairman, Bob Lutz, has cast doubt on the future prospects of electric car maker Tesla amid mounting financial losses. Photo / AP
Car industry veteran Bob Lutz has cast doubt on the future of electric car maker Tesla, which has struggled to make a profit, and suffered chronic production delays and quality problems.
The former high ranking executive from General Motors, now retired, said Tesla boss Elon Musk "hasn't figured out the revenues have to be greater than costs … when you are perennially running out of cash you are just not running a good automobile company".
A Los Angeles Times report said Lutz, 85, made the comments while addressing a crowd of vintage car collectors at an auction in the US.
Lutz praised the latest Tesla electric car as "one of the fastest, best handling, best braking sedans that you could buy in the world today" with enough acceleration to "beat any $350,000 European exotic".
However, Lutz said the future prospects of the company are grim.
"I don't see anything on the horizon that's going to fix that, so those of you who are interested in collector cars may I suggest buying a Tesla Model S while they're still available," Lutz said.
Afterwards, Lutz told a reporter from the Los Angeles Times: "Twenty-five years from now, [the Model S] will be remembered as the first really good-looking, fast electric car. People will say 'Too bad they went broke'."
Lutz — who has worked for BMW, Ford, Chrysler and, finally, General Motors before he retired from the US car giant in 2010 — is known for his direct and outspoken views in an industry mired in political correctness and marketing speak.
It is not the first time Lutz has questioned Tesla's "cash burn", drawing attention to it during a CNN interview in 2016.
"The last time I checked their quarterly cash burn is about $250 million. For a company that size that's horrific," Lutz said.
Elon Musk. Photo / AP
Although he was instrumental in approving the development of the Chevrolet Volt petrol-electric plug-in hybrid car, Lutz describes himself as a climate change sceptic rather than a climate change denier.
In 2008 he told a room full of journalists "global warming is a crock of shit", before explaining "I'm motivated more by the desire to replace imported oil than by the CO2 (argument)".
Among his list of career achievements, Lutz played a key role in getting the Holden Monaro coupe and Holden Commodore sedan exported to the US in the early to mid 2000s.
He was also a senior executive at GM in charge of future models when the company went into bankruptcy in the 2008-2009 global financial crisis, and it was forced to axe brands such as Hummer and Pontiac.
However, Lutz is not the only high ranking executive to question Tesla's claims.
Last year General Motors' director of autonomous vehicle integration Scott Miller said "I think he's full of crap" when asked about Musk's claims that certain Tesla cars "already have the hardware for full self driving capability".
Miller said Tesla vehicles currently lack the back up systems to properly deliver a truly autonomous car.
"Do you really want to trust one sensor measuring the speed of a car coming into an intersection before you pull out? I think you need some confirmation," Miller told Australian media in a technology briefing in Detroit.
Despite the gloomy forecast, Tesla is buoyed by the value placed on it by investors.
According to the latest data, Tesla has a market value of US$59 billion ($80.5b) and trades at US$351 a share even though it only produced 101,000 vehicles in 2017.
By comparison, General Motors has a market value of US$61.5b and trades at US$43 a share after producing more than 9 million vehicles in 2017.
The world's number one car maker Volkswagen has a market value of US$116b and trades at US$46 a share after producing approximately 11 million vehicles in 2017.
