AutoNation CEO Mike Jackson (Image Credit: <a href=flickr via NADA)" draggable="false">

AutoNation CEO Mike Jackson (Image Credit: flickr via NADA)

It's interesting that some media coverage of AutoNation CEO Mike Jackson's recent comments at the New York Auto Show claim that he "attacked" Tesla, and accused the company of being a Ponzi scheme ...

In fact, Jackson did say Tesla is:

"either one of the great Ponzi schemes of all time or it’s gonna work out."

He also said of CEO Elon Musk:

"You have to tip your hat that he’s created a brand that has a strong, cult-like following."

The upcoming Model 3 will be the

The upcoming Model 3 will be the "proof in the pudding" for the electric automaker's success ... or lack thereof.

And it's those cult-like reporters that are assuring that his words seem extremely harsh. Really, this is surprisingly mild coming from the CEO of biggest automotive dealer chain in the U.S., publicly speaking to the National Automobile Dealers Association. Dealers are surely not big fans of Tesla's direct sales approach, and ... Jackson doesn't exactly have a reputation for making nice. It could have been much more of an "attack" to say the least.

Jackson did have to throw in some words about Tesla's losses, but that's only partly true at this point. Jackson commented:

"Selling vehicles at a profit would be very impressive. Giving away vehicles at below what it cost you to make them is not very exciting."

Tesla's cars are priced at more than it costs to make them, and the company has recently turned a profit. Being that it's a startup, and has to catch up from a history in which profit was unattainable, it will be awhile before Tesla is out of the red.

To Jackson's credit, Tesla lost ~$900 million in 2015, and ~$800 million in 2016. However, the automaker had a whopping $8 billion in revenue last year. GM made a $9.4 billion profit in 2016, and sold 10 million vehicles. Tesla sold 76,230.

So, Jackson has some valid and verifiiable points, among some of his misconceptions. He went on to say:

"Clearly General Motors is undervalued and Tesla is overvalued. Anybody can see that."

This is an argument for another article. It all depends on how you view the market, or which analyst you believe. But the fact of the matter is that Tesla's stock price escalated to record highs, and its market cap did, in fact, surpass that of GM. There's no debate there. It happened.

Why did it happen? Again, another post would suffice. The nuts and bolts of it, though, come down to investors believing in the Silicon Valley automaker and its visionary leader, Elon Musk. The recent historic surge followed Alex Potter's (Piper Jaffray analyst) target upgrade to $368, from his prior forecast of $223. Potter explained:

"More so than any stock we've covered, Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate. As they scramble to catch up, we think Tesla's competitors only make themselves appear more desperate."

Source: USA Today