Bob Lutz On Tesla Motors 20 Years From Now

AUG 18 2016 BY ERIC LOVEDAY 156

Car & Driver via Ferdie Mazon

Car & Driver via Ferdie Mazon

Bob Lutz And Rick Wagoner Shake Over The Concept Chevy Volt At The 2007 NAIAS In Detroit

Bob Lutz And Rick Wagoner Shake Over The Concept Chevy Volt At The 2007 NAIAS In Detroit

Bob Lutz has been known to make some rather outlandish comments from time to time, some of which seem to pour negativity towards pure electric cars.

Despite being partially responsible for the Chevrolet Volt, Lutz appears to be pessimistic when it comes to most plug-in electric cars.

Recently, when Car & Driver asked Lutz “Will Tesla still exist 20 years from now?” he responded with a statement that basically says “no” there’s no possible way Tesla will stay afloat.

Here’s Lutz’ response:

“As it is presently no. As they say “socialism is great until they run out of other people’s money. Tesla burns cash. It’s not a car company, it’s a cult of fanatics who think Elon Musk can do no wrong. But financially, it doesn’t work.”

Tell us what you really think Bob…

His comments seems to show some jealousy and perhaps even some hatred towards the herds of Musk/Tesla followers.

While it’s true that Tesla burns cash than it brings in, which automaker didn’t in its formative years?  It does seem like most of the “cash burning” at Tesla is with an eye to reshaping the company and laying the foundation for how it builds EVs in the future.

But only time will tell.  

Regardless of the outcome, it will undoubtedly be an interesting journey to watch play out, and can only spur on faster EV adoption around the world.

Source: Car & Driver print edition via Ferdie Mazon on Facebook

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156 Comments on "Bob Lutz On Tesla Motors 20 Years From Now"

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Poor Bob. He has no idea what a start-up is, but he recognizes all the characteristics just fine. Tesla is focusing on market share, which steals from GM. Start-ups can’t be profitable year 1. Automotive start-ups? Year 10?

Tesla is way past year 10 already (not as a public company though).

And start-up captial needs very greatly by sector. The car sector is very cap-ex intensive.

That’s why all successfull car start-ups in recent decades have been subsidized (Korea in the past and currently the same in China).

Tesla is very unwise to add SolarCity – it will burn more cash as a result. Solarcity is another huge albatross around Tesla’s neck.

The Solar City capital requirements can be easily met with non-equity financing. The reason is that the hardware they install has a well defined cash flow and the bonds or other financial instruments that they sell can be secured with the installed hardware. So, if Tesla is smart, they will not use their own capital to continue the Solar City business.

They are merging, or it is what EM is pushing for. Both are burning cash like furnaces, so it will be great synergies. Prepare for new outlandish ideas to justify new stock sale rounds, maybe even this year.

“The Solar City capital requirements can be easily met with non-equity financing”

I didn’t refer to acquiring the company (TSLA will indeed pay with shares), but meeting ongoing obligations at SCTY.

SCTY will need fresh capital soon:

http://tinyurl.com/jsgj935

So will TSLA by early 2017. The combined amount is staggering.

Only the Wall Street Shorts are “terrified” of Tesla’s debt.

Look at the P/E ratios of Ford and GM, they’re priced for NO Future Growth. The Market is Betting On Tesla.

For some reason I thought they started in 2008. Started in 2003. Thanks for catching that. Solar City as a global company will do fantastically well as a Tesla brand. Like everything Tesla does, their disruptive goals are fraught with protectionist laws and policies in the USA, like city-owned power companies prohibiting you from installing solar on your own roof. My hope is this retro silliness goes away. I don’t understand: do you think solar is a gamble at this point, or merely Solar City?

Asking Bob Lutz to give advice to Tesla, is like asking an atheist how to pray. He is NOT a believer in EVs, so doesn’t get it.

Lutz overstates the fanaticism of Tesla supporters. The three Tesla owners I met all love the car and zero pollution, and none worship Musk. He also exaggerates subsidies, which are about 1% of Nevada Gigafactory income. One percent is a joke. He is smart enough to know he is blowing smoke. The question is why?

Is he just “Green” with envy about a younger man, whose fortune is 100 Lutzes?

Very well said Mr Whitehead. Why would anyone consider Lutz a good source of information. Now Robert Stemple was a real EV guy. He came to the APS Solar and Electric 500 competition and asked details about every electric.

Tesla is clearly on it’s way to become one of the largest company in the world. This poor Bob Lutz has no clue. By shorting Tesla, he will lose a lot of his retirement money. I am wondering why so many idiots are invited to talk on TVs. Marc Faber is another one. There is another possibility, this Bob Lutz is part the short group they deliberately do this when they try to push down the stock. Unfortunate for these guys, all larger shareholders are adding Tesla stock. In Q2 Fidelity added more than 4 million shares. T Rowe Price added more than 3 million shares. There are not enough weak hands for these short idiots to cover from. These idiots will collectively lose 200 billion dollars while Tesla become the largest energy and transportation company in the world. This will be fun to watch.

Not sure if you know who Lutz is (or his age), but I seriously doubt he cares about shorting Tesla stock. I also don’t think he’s worried about his “retirement money”.

Trot out the old warhorse one more time to the sound of the once cheering crowds, now thinning out with only a smattering of applause. Still, the old stallion puffs out his chest and prances, though a bit gingerly, in response to the bugle sounding the charge.

That Trumpet is playing Taps, for an automotive era gone by…

https://www.youtube.com/watch?v=S-Xrlf3taEo

YEA…, HE’S AN OLD GOOF WITH TOOOOO MUCH MONEY!!!1

You’d think these old dinosaurs would know what they’re talking about, however:
1) Lutz, where’s the “successful” hybrid truck of yours? You’re not doing as well as Tesla. Looks like Tesla will get to 50,000 pickup’s before you.

2) The MARKET is different from the talking head idiots on CNBC or Fox “Business”, which is just as Pay-to-Play as Fox “News”.

GM P/E is —: 4.4
Ford’s PE is -: 5.8

The market has decided that the FUTURE, in Real Money, Economic Terms is in Tesla.

WITH ANY LUCK 20 YRS FROM NOW OR SOONER(if real Luckey) BOB LUTZ WILL NOT BE AROUND & THEREFORE WE WILL NOT NEED TO TOLERATE ALL THIS NONSENSE FLOWING FROM HIS DHIARHIA MOUTH… HE WAS THE RIGHT GUY IN THE RIGHT PLACE HIS WHOLE LIFE …Goodbye Bob!!!!!!Enough Bob!

Exactly. He won’t be around to see if TESLA will be in business in 20 years. Maybe they should have asked “will you be around in 20 years BOB??”

Didn’t he say Tesla wouldn’t Last! Now he’s talking 20 yrs down the road. This guy needs a handler to control his mouth, Because he keeps putting his foot in it…l m a o ..

The business report makes clear everything.
Bankruptcy by all means.
Even without SolarCity.
After bail ot very, very quickly.

The new businesss report is telling the truth:
BANKRUPTCY even without SCTY.
After the bail out even more quickly.

LOSSES OF 294 MIO IN A SINGLE QUARTER !!!!

I predict that Tesla will easily outlive Bob Lutz.

Technically, Blackberry is still alive…

I doubt if the success of electric vehicles requires the survival of Tesla long term. The EV market will do fine either way.

If Croatia can produce the Rimac,
you have to wonder if Exxon is bribing these old dinosaurs NOT To Innovate.

For Christmas sake: CROATIA.

electric-car-insider.com

You don’t think the country of Croatia produces bright, capable entrepreneurs with good skills?

THEY HAVE SOME OF THE BEST! GOO CROATIA!!!!!!!

I think Croatia, clearly, has got some good engineers.

The point is it’s a small country, and this is a small company, and yet, they’re building a car better than Porsche, Mercedes, and GM and Ford.

It’s not like Tesla is an outlier, it’s that anyone with balls Can Do It. Balls, or not being Bribed by Exxon.

Nikola Tesla was born and raised in Croatia.

Nikola Tesla was born in Austria to Serbian parents.

I had the same thought.

If there is a God!

That’s what I was gonna say. In 20 years Bob Lutz won’t be around.

Tesla will be doing just fine.

But he is not totally wrong…Tesla is a cult of fanatics right now. And that is why they will succeed. Tesla has a strong dedicated fanbase that will keep buying the cars and providing capital until Tesla is mainstream.

Heisenberghtbacktotherootsandnuts

Fun fact: this article comes along with an ad for “shell v-power smart deal” while most other articles come with the classic ev charger ads…

Thanks google for putting things into perspective 😉

lutz has nothing to do with the advertisements.

the part about “socialism”, as applied to tesla, makes absolutely no sense. but aside from that, i do agree that the current tesla business model looks really shaky. the 400,000 “reservations” for the tesla model 3 does look more like cult behavior than reality. i am skeptical when people stand in line all night to put down a $1,000 deposit on a car when they don’t even know exactly what they are getting or when they are getting it. that’s not normal buying behavior.

but it seems that lutz qualified his statement by saying that tesla would not exist as it presently exists. i can agree to that point also because i think that musk’s primary objective is to develop assets which can then be sold. tesla is not run like a company that you would expect to still be in business 100 years from now. for example, the solar city purchase is ridiculous.

Well no comment,
You should take your ICE/MB blinders off.

Tesla is already destroying MB S class sales and Model 3 will do the same to C class, 3 series etc and it has nothing to do with your spin as shown by your derogatory “cult behavior” remark.

Compelling EVs are simply better cars then ones running on dead dinosaurs.

Tesla is here to stay and will dominate what will be a rapidly growing BEV market and eventually a rapidly growing PV with storage market.

Musk has made it very clear what Tesla’s mission is and that is truly sustainable transportation, not endless announcements about some distant future EV models/programs.

the benz-o is the world’s best selling luxury car. the 107,000 sold in 2015 is, i believe, about twice the sales volume of the tesla model s. the model s did outsell the benz-o in the U.S., but the biggest market for the benz-o is china, which accounts for about 1/3 of all benz-o sales.

so i don’t know how it got into the heads of ev enthusiasts that the tesla model s is “destroying” the benz-o. the two cars aren’t even in the same segment. what is really happening is that the benz-o is “destroying” the bmw 7-series.

Its competing very well with them (both mercedes and BMW). And given that it is constrained by production rather than demand well… Go figure… There is a very clear reason why BMW is directing they’re advertising efforts tesla explicitly.

The Mercedes at least will be able to produce seats, dashboards, tumblers and saloon plastics for the future Tesla models. So, everything’s gonna be OK:))

What car company can you expect to be in business 100 years from now? GM? Chrysler? Both of whom were saved from oblivion by socialism in the form of government loans.

Whoever thinks they know that is a blithering idiot!

We don’t even know if cars will be around then. Maybe we will all be flying. Or teleporting. I hear it’s incredibly convenient!

Their are plenty of socialistic contries doing just fine. Look at the nordic ones.

True. Countries which it’s designed to do well in. No one system is right for all countries.

Please. Social democracy is hardly socialism. And the Nordic countries mostly have right wing governments these days, so they are rather becoming more hard core capitalists than socialist.

soc vs cap is cold war non-sense. It is all part of the same “us vs them” c**p that the world so often gets stuck in. Usually during an election. The USA has plenty of socialist policies and China has plenty of capitalist policies. I am not saying that the USA is socialist but just that you can’t pigeon hole anyone with these definitions because they are non-sense.

Lutz looks like he’s been paid to spew some Koch horseshit. The Koch’s have “socialism” on the brain, along with crack.

The purchase of the clean energy production component for a clean energy company is ridiculous?!
Well okay then.?

i appreciate that the two enterprises share some technical core competencies, but the markets, the distribution and the regulatory issues between automobiles and energy storage are very different.

Which is EXACTLY why you garner Solar City’s expertise in those areas!

Wow – some commenters here must have a lot of money to burn…to write off $1k – ONE THOUSAND US DOLLARS – as a “cult following” is insane. A cult following camps out for a few days for a $100 front-row seat to an outdoor concert. We know what we are getting because Musk said what the Model S would be, and it is better. And it’s available globally, and continues to exceed expectations. Same with the Model X. Both sell faster than they can make them – let that sink in, after the Model S has been delivering for nearly 4 years now. The Model S outsold Mercedes S-class in North America and Western Europe!! The market exists and shows no hint of a trend reversal, and the customer satisfaction remains off the charts (people who actually own one!). So, if the disparaging comments are related to an assumption that Tesla Motors is a high-risk proposition, then you are blind and/or a fool. They are clearly not going away. The risk is not high. Production delays are not a concern because they have, in the end, gone to production, and the vehicles exceed what was promised. The only concern… Read more »

I know people who have paid thousands of dollars to see a concert. Many pay $700 to see Barbara Streisand. Doing a $1000 deposit for some, including stock investors, is not hard. It is fully refundable.

Musk’s primary objective is to save the biosphere, (and inhabit mars) – not make money. He has been consistent about this in all his words( interviews) and deeds (using his last few million to save Tesla in 2008)

Tesla, in their conference call, would be profitable – CAPEX spending.

In other words, they’re profitable today, if they stop their ambitions and only build Tesla cars, and depend out outside suppliers for batteries.

“no comment” commented:

“…i think that musk’s primary objective is to develop assets which can then be sold.”

I don’t know if you’re actually shorting Tesla stock, “no comment”, but statements like that certainly make it look like you are.

Companies that are being built just to be sold off don’t repeatedly “bet the farm” on such endeavors such as abandoning their first product (the Roadster) to go “all in” on a new product (the Model S), nor again “bet the farm” on a $2.5 billion investment in a risky endeavor such as a battery Gigafactory.

Bob Slutz 20 years from now: ____ Something f’d up I wont say but hey thats life.

“As it is presently, no?” WHAT A PREDICTION. THIS GUY IS A GENIUS.

By the way I am also predictng that Tesla won’t exist in 2035 as it currently does. But no-one listens to me…

i believe that what lutz is saying is that the business model doesn’t work.

GM’s business model didn’t work.

Tesla’s business model is ever-evolving. It gets regular OTA updates, LOL.

“no comment” said:

“i believe that what lutz is saying is that the business model doesn’t work.”

It worked for Amazon.com. It worked spectacularly well for Amazon.com. Of course, that’s no proof or even strong evidence that Tesla will succeed long-term, but comments like that are ignoring a rather large elephant in the room.

Unlike Bob Lutz’ GM Tesla isn’t ultimately run at the taxpayer’s expense so it will have to write black ink at some point.

Seems to me “burning cash” for an investment that should result in the first EV that will sell in the sort of large numbers car economics are based on is a great way to achieve that.

Retirement is no fun anymore, unless you’re self-immolating.

LOL nice!

I live in fremont ca were the tesla MFG cars.The company is working 3 shifts 6 days a week with about 6 billon dollars cash in the bank.Not bad for a start up company.TESLA is the future.

Bob forgets to take his medicine some times. Seriously though, when do we get to see the finished Model 3??

Bob Lutz is a delusional dinosaur, responsible for such amazing products as the Hummer (where are they at today?) and the Pontiac Aztek…not to mention the ELR which never even came close to competing with the Model S. Yes, Tesla is spending money, but it’s an investment in infrastructure, production equipment/facilities, and growth, not a “cash burn” as the ignorant like to call it.

Cash burn is what the knowledgeable call that sort of an investment, too. That’s not necessarily bad, but Tesla is also showing operating losses even on a non-GAAP basis. That at least isn’t good, but they still have chances to turn things around.

it all depends on *why* the cash is being burned. if cash is being burned on stuff like inventory and accounts receivable, those are not investments.

with its current distribution structure, tesla has got some serious cash burn issues ahead of it if they are to meet the kinds of delivery figures that they are boasting. they can offset that by ramping up production capacity gradually (which they seem to be doing) and delivering cars on a gradual ramp increase (which i expect they will do).

as you noted, tesla does have show operating profits. it’s not a surprise that they aren’t there right now. i think that tesla is planning on achieving benz c-class/bm 3-series sales levels with the model 3. i suspect tesla will at some point have to adopt a dealership model because it is hard for me to see the direct sales model as being scaleable.

I see Hummers & Azteks driving around every day. Note the Aztek was ahead of its time, thus got a bad rap. It was also before Bob Lutz took over product development.

Lol bobby! As someone has already pointed out, what a genius to say Tesla won’t exist as it as today 20 years from now. I bet Tesla will exist in some form or fashion but I’m not very sure about GM.

By the way, GM does not exist today as it did 8 years ago before they were rescued out of collapse by the US Government.

I’m sure Warren Buffet would agree 100% with this analysis. Buying the stock of a company which engages in endless forays to the capital markets for more and more money which will be gobbled up producing unprofitable vehicles is not what one would call “value investing”.

You can call this “hatred” but I doubt Warren even holds the slightest animosity towards Tesla.

Don’s serial dislike of Tesla/Musk shows once again.

You mean like Amazon, Don because that is probably the closest parallel?

Tesla is wisely investing in huge capacity for compelling, long-range BEVs and battery storage for both solar PV homeowners like ourselves and for much bigger applications too to get around the eventual end of net metering.

With 400,000 reservations with $1000.00 apiece for the Model 3, Tesla is getting well set-up by capacity to absolutely dominate for the next 5-10 years at least in what is very likely to be very strong growth in these markets.

Similar to what Amazon did for online retailing and if you have any doubts just look at what Space X has done to the behemoth Boeing/Lockeed Martin coalition ULA or on a smaller scale what Model S has done to MB S class sales.

http://left-lane.com/us-sales-2016-first-half-limousine-segment/

Of course I don’t expect facts will cut through the mental aversion towards Tesla/Musk.

Amazon had one secondary share sale and managed healthy cash flow all the time. No pumping and dumping rounds every year. Not a favorable comparison.

The profit margin for the “unprofitable vehicles” is 27%.

It is not true. It is not “profit margin”, it is “gross margin”. I guess you should now what the “gross” mean? And it is calculated completely differently from what other automakers do. It misses sales costs that are huge for Tesla, as it runs whole distribution network on its own expense and capital. Basically this gross margin on car retail price, which is complete nonsense. You need subtract some 22% from it that is “Selling, General and Administrative Expenses” in Tesla accounting and it becomes much smaller. Then you subtract R&D and you will go far into negative territory.

R&D is huge for them because, shocker, they’re doing new things.

They’re throwing billions into battery and car production facilities. Right now that means they aren’t turning a profit, but once they go online, they can cut back on building expenses. Then it’s billions in profit time. If half their Model 3 pre-orders pan out, that’s over 5 billion they’ll bring in. If those go well, there will be many hundreds of thousands more orders to follow.

There are people out there that do things for the good of humanity, Bob Lutz and others in Wall Street are incapable of think beyond greed. Elon has fans because is the kind of billionaire to whom many people identify themselves.

Warren Buffet also says to buy companies with a big moat around them and Tesla has a huge lead on everyone else making EVs. He also says to buy companies with great management and Tesla has that too.

The key to me is execution. Tesla has a solid plan to profitability, provided they execute their plan. So far, what they have accomplished is amazing, despite some delays and SNAFUs. Hopefully, they learned from their hubris with the Model X and deliver the Model 3 relatively on time.

i think that tesla is indeed not a stock which would be of interest to warren buffer. that doesn’t mean that tesla can’t be a successful stock; it’s that buffet has his discipline for how he does investment and tesla is a bit too close to being a “venture capital” type of play for a comparatively conservative investor as is buffet.

Well, Warren owns a significant chunk of a Chinese company who is or may become a competitor to Tesla (i.e., BYD), so it’s not surprising that he doesn’t buy TSLA.

DonC said:

“…a company which engages in endless forays to the capital markets for more and more money which will be gobbled up producing unprofitable vehicles is not what one would call ‘value investing’.”

“You can call this ‘hatred’…”

No, I call this “FUD B.S. from a perpetual Tesla short-seller”.

The Tesla Model S certainly is a profitable vehicle, with a gross profit margin between (as I recall) 22%-27%.

Only Tesla bashers would call making and selling the Model S “unprofitable” simply because Tesla is investing more in growing the company — capital investments, not manufacturing and operating costs — than they’re making on profits from selling their cars.

Wise words from Bob Lutz!

To quote him “Socialism is great…Elon Musk can do no wrong…”

I agree with him, except for Elon treating his wifes as employees so I would add an “almost” to the latter part of the quote.

Thanks god you are a troll, I can’t imagine the world full of fools like you. Too much envy of Elon, get therapy.

WTF?

It’s time to put down the bottle (or whatever you are on). Later on when you are sober you can explain what you mean and why you felt the need to leave what seems like nothing but a trolling comment.

I’ve got this one:

MDEV – “Thanks…you…I can’t imagine…too much envy of Elon, get (Model 3)!”

I also agree. Elon is perfect and can’t be envied enough! I hope that by waiting in line on opening day, that I’ll be able to secure a late 2017 Model 3.

Really???
Do you have inside info???
Are you sure his wifes might not be using him for a never ending ATM machine???

Thank you, Yoda.

It’s truly bizarre to see people making nonsensical, WTF? comments complaining about other people responding with more nonsensical, WTF? comments.

There is certainly no guarantee that Tesla will survive but I think Lutz is a bit too pessimistic. Of course, he has his reasons for that being a GM guy.

The model 3 is absolutely essential for Tesla. Not only does it have to be a smash hit (and it does look good so far) but it also must push Tesla into the black. They need to be able to ramp up fast enough to start making a profit before their cash runs out. Competition is coming, the Bolt alone is not going to kill Tesla but around 2020 every car manufacturer will have products out that compete with Tesla. Increased competition means fewer people are willing to put more money into Tesla should it be needed. It will get a lot tougher.

SOT – “Competition is coming, the Bolt alone is not going to kill Tesla but around 2020 every car manufacturer will have products out that compete with Tesla.” Tesla is not simply a product making company, in case some have nit realized it yet: Tesla is a Solutions Company! Long Range Electric Cars without a full network of fast charging stations for using them to drive beyond commuting is but one primary difference Model S owners can tell you about, and also Modem X owners. Soon, Model 3 owners will be deciding how they want to access that, but until the ‘Competition’ starts to ensure that a similar product or service is available to their buyers, their products won’t be that strong of a competitor to the Model 3. That said, if I had the bucks, I would buy a Bolt, while I await my my Model 3, if only for having the ability to do an owner driver comparison for referenc!! I doubt I would try to drive the Bolt EV from Toronto to Key West, like I have driven my 2010 KIA Soul, and a friend has driven his Tesla Model S 90D a week after getting it,… Read more »

But the charging networks are also evolving rapidly. Over here in Norway, a 200-mile car won’t be charged other than at home and work except once or twice a year for most people. Having to spend fifteen minutes extra or pay eight bucks on those occasions is nearly irrelevant.

Already next year we get cars with enough range that most people very rarely will wish they had more. The exceptions tend to be situations that require so much more that no EVs this side of 2025 seem likely to fit. Seen the videos where Bjørn Nyland tows a boat? A task that would take him four hours with any old ICE to him fourteen using his brand new Model X P90D.

Tesla is the current technology leader, but it’s impossible to know if that will last. Only when the incumbents make more money on selling an EV than another car will we begin to see what they can do. The only reasonable thing to expect is that it will indeed be much tougher competition for Tesla in the next decade. That’s not too say they cannot succeed. But it’s not a given at all!

That may be true; however, in the US, which is a huge market, people like to drive, and there are tens of thousands of square miles of wilderness that people like to go and see. A 300-mile Tesla with strategically-placed SCs is just what the doctor ordered.

Oh, and road trips are a thing, here. People love that, even when they could be getting where they want to go by train or plane…we love to drive and see what’s along the way.

I think that is one thing that gets people going here, is that different markets have different values. Musk’s plan, with 200+ mile EVs and the SC network, is as good as gold in cultures and geographic distributions like the USA. In European markets? Asian markets? Perhaps not, or at least not as important as other factors.

By the time the model 3 is out and generally available there will be a lot more charging stations available than there is today. The Supercharger network is great today but it will lose its importance by 2020. The one great thing about SC then will be that it’s owned by a single entity so you won’t have the hassle with different memberships, rebate systems and more but I think the fragmented market will consolidate into 2 or 3 large players.

That’s about right, SOT! If they start M3 deliveries by Q2 of 2018, then the company should be profitable sometime around 2022-23, when volume production is up, when stores and service centers are pretty well done, when the SC network is pretty well built-out, and after GF1 has been completed and fully operational.

At that point, I would hope that sales would cover operations plus new model development plus GF2. If not, then I guess I won’t have a replacement pack for my Model 3 in 10 years…

“Someone out there” said:

“Tesla… need to be able to ramp up fast enough to start making a profit before their cash runs out.”

Hmmm, I think Tesla has always operated on negative cash flow… on continually borrowing more money from investors to continue growing the company. I’d say they need to start making a profit before their debt becomes so large that they can no longer borrow more money at a reasonable rate.

Sigh.

Socialism is living off of the government’s money (through other people’s taxes), not investors. The $7500 incentive isn’t material to Tesla’s bottom line – the type of people buying a $100,000 automobile probably aren’t swayed by $7500 off.

Tesla is living it up on the market’s money. When the market has decided that Tesla’s risk of not pay back its loans has gone up, then it will charge them a higher interest rate to counter that risk. Tesla will then know it should borrow less money.

Tesla’s goal is to bring sustainable transport to the world as fast as it can. This requires leveraging large amounts of money. Tesla might try to build the next, even bigger and more advanced Gigafactory after this one is done, that requires it to take loans out.

What is more important, objectively, to the long term survival of Tesla is does the Automotive operations make money, and enough to pay overhead and some R&D. I think that 2016 as whole may be indicative of that – 80-90K vehicles per year is probably a good run rate for long-term for the S/X models.

LOL! That’s not what socialism is. What you describe is what American social conservatives morphed the definition into during the fifties and sixties! You know, when the plain old government became the “evil” government, for its interference in people’s “way of life”. There is a long history with regard to that word and a LOT of individuals have built careers on its misinterpretation.

Tesla bonds are rated as junk and trade well below face value for long time.
They don’t have any other way to finance their operating losses, not to mention required capital investment, but pump and dump shares every year. With SolarCity cash furnace merger, the process accelerates, they will need even more regular infusions of cash. Any regular recession or turmoil in financial markets will mean closure of financing and then only government can save them at the expense of everybody else.

So were Amazon and Google bonds when they were young companies you serial anti-tesla fudster troll!

400000 times average 42000$ = 16.8 Billion $!

Tesla is fine, thank you.

GM still exist and was in a way worse condition than Tesla

Didn’t this Dinosaur come from a company that file for BK?……..lol

When is the current company he works for going to come out with a mass produced BEV?

Or is he going to keep ripping the EV drive trains out of Karma’s and slap in a goo gobbling OPEC sukler ICE and call it Destino?

This whole article is useless as is Bob Lutz

Yup, keep building the ICE cars there and continue your dependency on swallowing OPEC juice Bob.

http://henrikfisker.org/products/production-cars/2016-destino-v8/

How many VIA Motors trucks does one see on the road? He’s in the same boat with a statement like this because VIA most likely won’t be around in 20 years either.

+1
It seems he gives interviews & forecasts on every subject under the sun, but is mum on the actual company he’s Chairman of…
As far as intensive googling can find, Via Motors has sold zero vehicles so far, despite having gotten the EPA and CARB certs for the vehicles over a year ago. Their last press release was also about a year ago.

Tesla understands the important IP in EVs is in the batteries (and motors to some extent, and the software). They are investing heavily in battery manufacturing because they know this will pay off in the emerging energy storage market which Lutz knows nothing about.

Lutz is an idiot. He dares to talk trash about the innovator of EV. Elon puts EVs on the market at an international scale that no other company can compete with. Just some jealous publicity Lutz can not withhold in himself. How pathetic

I think Eric Loveday intentionally misconstrued the quote to generate more key clicks here, or to do the spicing up of the website.

Mr. Lutz said that Tesla would not exist as current constructed.

That’s not that hard to fathom. Tesla is different than it was prior to Musk’s hostile take over. A few lawsuits ensued, eberhardt aparently settled as well as others, 4 of the VERY GOOD Tesla engineering team died, and the Roadster continued.

20 years is a long time. It does not seem unreasonable that Tesla or the subsequent company that Tesla became, finally gets a workable business model. – of course, perhaps the stock and bond market can stay elevated another 20 years – admitedly doubtful, but I’m not going to be the one to say it couldn’t happen.

If it does stay levitated, then Tesla as currently constructed will feel no pressure to readjust to any new realities.

It doesn’t take much to stir up the Musk-eteers.

the question asked for a 20 year horizon, but in his answer, what lutz said is that the *current* tesla business model doesn’t work.

I think the biggest long-term concern about Tesla is not “socialism” or similar boogeymen, but rather Elon’s leadership.

The 2-year-late Model X rollout was a debacle, his claims about the “goals” for the Model III production ramp-up (200k MIIIs in 2017?) are frankly unhinged, and the Solar City bailout is overt nepotism. He’s the man to whom no one at Tesla will say no, and it’s not a good look.

I don’t think the Model X delay hurt Tesla at all. The Model S was far more successful than they anticipated and they didn’t need the X to be released earlier to keep demand up to meet their overall production targets.

The Model 3 targets are mind boggling, but time will tell whether all the customers will materialize and how fast Tesla can ramp up the production of that vehicle. I for one, will not bet against Tesla.

i agree, i think that the model x is insignificant to the prospects of tesla.

Mike I said:

“I don’t think the Model X delay hurt Tesla at all.”

Just what I was gonna post, so thanks.

My concern is when tens of thousands of non-EV zealots get their hands on Tesla products. They will not be as forgiving as the fanbois. All the quality issues really need to go away.

True, but they will anyway become converts at a high rate thanks to the incredible performance and smoothness and so on of the car itself. It will seduce many many more than the current cars ever did. Unless quality issues get worse than they currently are with Model S I think many will be forgiving. And they can of course get better at it. I think the timeline is the most critical part as a two year delay would cost so much more this time around. I have to suppose that their targets may be missed, but if they get within, say, 70% of them and manage to become profitable it seems to me they would be in a fantastic position to execute part two of their hyped master plan. Admittedly I don’t really know how transferable knowledge about producing Model 3 at scale is to a pickup truck, but I’m guessing quite high. None of the incumbents seen to have any difficulty following trends (such as start making SUVs) and this to me suggests the challenges in making different vehicles are very similar. That said it’s obvious that Tesla is still unproven as a large-scale manufacturer. There’s risk at… Read more »

They need to invest in a lot more service stations and service techs. As well as replacement parts. I’m hearing the wait times for repairs is not good. What happens when there are 200,000 Teslas on the road?

Tesla has already announced their multi-prong plan to increase the number of service center, better handle service appointments, and to implement a quick fix queue. What part of their plan do you have a problem with?

If that is part of the plan, then I don’t have a problem with it, and welcome it. I will have to make a decision on a Model 3, when I’m invited to order, and I will look at the *current* serviceability at that time. I’m not going to purchase based on the promise of more service centers/parts.

if most people had to choose between a chevrolet bolt and a tesla model x (most people would choose neither), but i would guess that more people would choose the bolt. chevrolet has an established dealer network, so it is easy to find a retail outlet nearby and people know where to go to get support.

LOL!

Seriously, you’re suggesting that most people would prefer a Bolt to a Tesla car because they would rather deal with a “stealership” than with Tesla’s superior approach to selling and servicing its cars?

I guess you think your readers don’t know that Tesla’s “no hassle” sales and its outstanding reputation for customer service are two of the reasons why Tesla has a higher customer satisfaction rating than any other auto maker.

I am pretty sure that since Tesla is leading the EV revolution, they will be there in 20 years and will be one of the major car companies, but we don’t know if GM, Fiat, Ford, VW, Toyota, PSA, Mercedes, will be there and if they are we know for sure that they won’t exist as ICE car manufacturers as they do now.

On socialism, I would rather consider the end of the free pollution socialism by any ICE car; ruining other peoples healthy environment can’t last for ever indeed. But Tesla’s investments can go on for another decade before they reach VW size production.

Should I go with Bob or with huge baking machines that probably have insider info and have increased their shares in Tesla after the Solor City announcement???

What Lutz is saying sounds an awful lot like what some pundits and established technology (such as it was) company types said when Apple came along. And we all know how that turned out.

Tesla is burning cash on capital investment, including the only comprehensive nationwide fast charger network, more dealers and service, bigger plants, battery production, new car designs, and more. All of which add value. It’s a big part of the reason they got almost 400K reservations for the M3. Lutz is consistent if nothing else, but unfortunately very likely consistently wrong.

I’d say Tesla will be around long after Lutz is no longer around. There is a difference between burning cash during peak production with factory in place vs ramping up capacity and production facilities.

The fanatics Lutz despises are called customers happy that someone is delivering a product they want.

Well, he actually qualified it by saying “as it is now” – which is obviously correct. Tesla cannot realistically lose money at an accelerating rate for 20 years.

Of course that isn’t the plan either. And my guess is that if they’re asked what propulsion technology is the future he would have responded “electric” just like virtually everyone in the entire industry.

Will Talk Tesla manage to develop into a business? Who knows? It seems like they have excellent chances. They are certainly creating a lot of buzz and they excel at the rather important customer satisfaction metric. If it all comes together with Model 3 I reckon they could become profitable fairly quickly – although that’s just a guess.

But nothing like provocation to get the comments flowing… I’m surprised Pu-Pu hasn’t posted a hundred replies!

Yeah, by 2022 we should be seeing some black. If not…well…

Is that you elon?
India will bail you out.
Why did Obama loan a foreigner money to start this company when he wouldn’t finance Americans?

What foreigner are you talking about? Bob Lutz, born in Zurich, Switzerland, the son of Margaret and Robert Harry Lutz?

Stop your silly xenophobia. Everybody here came from somewhere else somewhere in their heritage. ALL Americans are equal.

Hmmm, I think he’s suffering under a couple of misconceptions; that (a) Musk, who emigrated from South Africa, created Tesla Motors, and (b) that Tesla was started using a government loan for funding.

Both false.

Thanks Bob for your input on Tesla in its current form. Yes, Tesla will probably be bought out at some later date. But, not in the distressed fashion that GM, your former employer, was by the US taxpayers, back on 6/1/2009. It had not been even a full year, after oil hit $147.00 a barrel, that GM was looking for Federal bailout loans in chapter 11.

The Via Motors Company really needs you to start making a few more buddies in the newly transforming auto industry. Start with “Saint Elon”, as he and his super charger network could make your companies PHEV pickup truck “VIAble” for working Middle America and its affordable near term long hauling needs. The sooner they ween themselves off of oil from conflict areas ( Middle East ), they won’t have spend their hard earned tax dollars abroad trying to secure their supply.

Agreed!

So, the company that got bailed out by the tax payers is calling another a socialist? Don’t forget FiatChrysler, who got bailed out and just announced it is moving all their production offshore. Except for Ram and Wrangler which no one else buys, but Americans.

BTW where are the Bolt parts being manufactured? LG is in Detroit right? /s

I WOULD NEVER BUY OFFSHORE PRODUCTS ,ONLY F00LS DO THAT!!

Beware that to the half of Tesla buyers, a Tesla is actually an offshore product. 🙂

What a fool idea to simply look for the most compelling EV.

“It’s not a car company, it’s a cult of fanatics who think Elon Musk can do no wrong.”

Aren’t the comments below this article the absolute proof that the guy is right?

Our Father Elon, which art in Freemont,
hallowed be thy name;
thy EV come;
thy will be done,
on Earth as it is on Mars.
Give us this day our Model 3.
And forgive us our past gas uses,
as we forgive the oilies that trespass against us.
And lead us not into gas-guzzler temptation;
but deliver us from oil.
For EV is the kingdom,
the power, and the glory,
for ever and ever.
Amen.

“And forgive us our past gas uses”

ROFLMFAO! Love it!

Maybe the next line should be:
“as we forgive those who burn gas against us”

Still laughing.

That reminds me, it’s the noodly holy day of Friday! It is spaghetti and wine night, in celebration.

Where’s my pirate hat?

Kodak’s ex-ceo said that Digital cameras will remain expensive forever. You see where Kodak is now.

Hopefully GM does not want to make the same mistake and that’s why they started selling Volt and pretty soon Bolt.

Tesla has always been the leader and GM is just the follower.

But we should still appreciate Bob Lutz for pushing GM to make Volt. Thank you gentleman.

http://www.hyundainews.com/us/en/models/ioniq-electric/2017/specifications

Hyundai has posted the specs for their Ioniq Electric, Plugin & Hybrid. Seems the vehicle has 119.2 cu. ft. of interior space which is very spacious than most mid-size sedans.

Ioniq is also an interesting vehicle, though it does not get much coverage.

Tesla is the most fun and exciting Cult out there.
You dont see L. Ron Hubbard reintigrating into another body and building an almost divine electric car.Fat chance.
And the other auto churches are going the way of monster truck mystery cults.
Oil is the opiate of the masses my brothers.

Lutz is just a sour old man upset that someone half his age sells vehicles way better than he could ever imagine. The reason why he calls it a cult is that it’s inconceivable for a GM guy to witness so much enthusiasm for a car. It’s not a cult or a religion, when you drive it you’ll hate everything else on the road.

Bob who?

Bob is being generous. I don’t think that they will be around in TWO years.

Isn’t it amazing how in these Tesla articles we keep seeing new usernames magically appear to sprout anti-Tesla FUD that echos the same FUD of the few serial Tesla haters/shorters that repeatedly pollute this site?

1 year ago last week I challenged another Tesla is doomed genius in another forum to tell us when this would happen. According to him, Tesla is dead right now.
These people are willfully stupid, that’s all.

Nobsartist said:

“I don’t think that they will be around in TWO years.”

Then perhaps you should re-start the “Tesla Death Watch”. It was fun reading — and laughing at — those ridiculous frequent predictions of Tesla failing, based on everything from flimsy cherry-picked evidence to laughable misinterpretations of fact, on “The Truth About Cars” website.

Sadly, the Tesla Death Watch series was ended after 41 posts, with Tesla stubbornly refusing to show any signs of going out of business. That was in December 2008. Yet all too many Tesla bashers are still spouting the same absurd, ill-informed cabbage, eight years later.

This is the same climate-change-denying Bob Lutz that bought a retirement condo in the Florida Keys that will soon be under water. He forgets that GM got a huge $11 billion bail out for failing at their own business model

EV incentives (available on all EV purchases) are to get the industry (finally) started at saving the biosphere and when cost parity is reached with ICE cars in 2022, the incentives will end.

Hopefully Lutz will catch Zika virus while in the Florida Keys but knowing his climate change denying belief he will not connect the dots between global warming and Zika. BELIEVE ME

Gosh, I thought diseases were spread by human travel long before anybody ever used the term “global warming”.

I didn’t realize that global warming was a factor back in the 1500s, when epidemic diseases wiped out the majority of the native population of North America. Silly me. /sarcasm

I like the kind of cult where you get to drive around in a Model S or X…
Where do I sign up?

PLEASE STOP WRITING ARTICLES QUOTING BOB LUTZ? WE DON’T CARE WHAT HE THINKS.

WHY DON’T YOU ASK HIM IF HE’LL BE ALIVE IN 20 YEARS?

Socialism! Hey Bob what do you call GM? The company that was bailed out by the government. That is socialism. Tesla on the other hand makes products people want. If you enjoy driving a car you can’t help but love Teslas. The torque is just pure joy. If you have a conscience about the environment or are smart enough to know oil supply is finite well that is just the icing on the cake.