Monday, April 17, 2017 5:15:23 PM
re;
$TSLA $GM Tesla stock may be soaring, but Elon Musk's business model is doomed, says former GM Vice Chairman Lutz
http://www.cnbc.com/2017/04/12/tesla-stock-may-be-soaring-but-elon-musks-business-model-is-doomed-says-former-gm-vice-chairman-lutz.html
Tesla's lack of pricing power is going to lead to its demise, Bob Lutz says.
"Elon Musk is the greatest salesman in the world," Lutz acknowledges.
But Lutz claims real numbers don't lie.
Matthew J. Belvedere | @Matt_Belvedere
Wednesday, 12 Apr 2017 | 1:29 PM ET
Elon Musk, co-founder and CEO of Tesla Motors, speaks at the 2015 Automotive News World Congress January 13, 2015 in Detroit, Michigan. Former GM vice chair: I think Tesla is doomed
Wednesday, 12 Apr 2017 | 11:17 AM ET | 05:24
Tesla's lack of pricing power is going to lead to its demise, Bob Lutz, former vice chairman of General Motors, told CNBC, two days after the electric automaker briefly topped GM's market capitalization as the nation's most valuable vehicle manufacturer.
But Lutz, a well-known Tesla skeptic, said Wednesday on "Squawk Alley" that "I think they're doomed."
"Their upside on pricing is limited. Everybody else sells electric vehicles at a loss," he said. "The puts a ceiling on your possible pricing."
Since Tesla, co-founded and led by billionaire entrepreneur Elon Musk, can't make money on the high-end Model S sedan or Model X sport utility vehicle, "how in the world is he going to make money on a $35,000 small car?" asked Lutz, referring to the more affordable, upcoming Model 3 sedan. "The cost of a car does not come down proportionally to price."
Shares of Tesla have backed off their all-time closing high of $312.39 on Monday. And according to FactSet midday on Wednesday, Tesla's market capitalization of $49.4 billion is just shy of GM, but still well above Ford's $44.7 billion. Tesla passed Ford in market cap last week.
"Somehow it's levitating. Elon Musk is the greatest salesman in the world. He paints this vision of an unlimited future, aided and abetted by some analysts," Lutz said. "It's like Elon Musk has been beamed down from another planet to show us mortals how to run a company."
But Lutz said real numbers don't lie. "It's a constant cash drag. They're highly dependent on federal government and state incentives for money." He added, "They have capital raises all the time."
Tesla is also facing competition from established automakers. "Mercedes, BWM, Volkswagen, GM, Audi and Porsche are all coming out with 300-mile [range] electric luxuries," Lutz said.
Tesla did not immediately respond to a request for comment.
Recent TSLA News
- Anglo American Rejects BHP Group’s Offer, Toyota Invests $1.4 Billion in Indiana, and More News • IH Market News • 04/26/2024 11:48:07 AM
- Futures Pointing To Sharply Lower Open On Wall Street • IH Market News • 04/25/2024 01:09:21 PM
- U.S. Futures Drop in Pre-Market Trading as Tech Stocks Plunge After Meta Issues Gloomy Forecast • IH Market News • 04/25/2024 11:53:54 AM
- U.S. Stocks Finish Lackluster Session Little Changed • IH Market News • 04/24/2024 08:33:00 PM
- Block Innovates Bitcoin Mining, DOJ Proposes 3-Year Prison for Changpeng Zhao, and More Crypto News • IH Market News • 04/24/2024 05:50:55 PM
- Upbeat Earnings News May Lead To Extended Rebound On Wall Street • IH Market News • 04/24/2024 01:09:05 PM
- U.S. Futures Display Mixed Results Amid Earnings, WTI and Brent Crude Prices Dip in June Futures Trading • IH Market News • 04/24/2024 11:31:20 AM
- Tesla Surges 12% with 2025 Affordable Vehicle Promise, Evotec Slumps 36% on Uncertain Outlook, and Latest Earnings • IH Market News • 04/24/2024 11:29:58 AM
- Coca-Cola and Microsoft Sign Billion-Dollar Agreement, Apple Event Set for May 7, and More News • IH Market News • 04/24/2024 11:28:02 AM
- Stocks Close On Firm Note For 2nd Straight Day On Earnings Hopes • IH Market News • 04/23/2024 09:00:38 PM
- Tesla Releases First Quarter 2024 Financial Results • Business Wire • 04/23/2024 08:09:00 PM
- Futures Pointing To Extended Rebound On Wall Street • IH Market News • 04/23/2024 01:11:27 PM
- U.S. Index Futures Rise in Pre-Market, Oil Prices Dip Slightly • IH Market News • 04/23/2024 11:26:41 AM
- Apple Loses Market Share in China, GM Surges in Pre-Market Following Upward Revisions for 2024 Projections, and More News • IH Market News • 04/23/2024 11:25:34 AM
- U.S. Stocks Close On Bright Note Despite Coming Off Day’s Highs • IH Market News • 04/22/2024 08:38:04 PM
- Despite Record EV Production Numbers, Shortage of Battery Metals Looms • PR Newswire (US) • 04/22/2024 03:24:00 PM
- Despite Record EV Production Numbers, Shortage of Battery Metals Looms • PR Newswire (US) • 04/22/2024 03:23:00 PM
- Despite Record EV Production Numbers, Shortage of Battery Metals Looms • PR Newswire (Canada) • 04/22/2024 03:23:00 PM
- Li Auto Stock Drops 7.3% Amid Tesla Price Cuts, Salesforce Retreats from Informatica Deal, and Other Market Updates • IH Market News • 04/22/2024 12:09:21 PM
- Nasdaq, S&P 500 Extend Losing Streaks On Tech Weakness But Dow Advances • IH Market News • 04/19/2024 08:32:14 PM
- Paramount’s Shares Surge Following Sony and Apollo’s Joint Bid; ISS Backs Berkshire Hathaway Director Re-election, and More • IH Market News • 04/19/2024 11:31:22 AM
- Apple to Invest $250 Million in Singapore Expansion, Oracle Commits $8 Billion to Japan Infrastructure, and More News • IH Market News • 04/18/2024 11:11:52 AM
- United Shares Surge 5.3% in Q1 2024 Earnings Beat; Take-Two Cuts 5% of Workforce, and More News • IH Market News • 04/17/2024 10:57:39 AM
- Ericsson Soars with 66% Net Profit Growth; Live Nation Under Antitrust Scrutiny in US, and More News • IH Market News • 04/16/2024 11:18:19 AM
- Tesla Cuts 10% of Workforce, VP Resigns as Shares Fall 4% • IH Market News • 04/15/2024 06:42:49 PM
Bantec Reports an Over 50 Percent Increase in Sales and Profits in Q1 2024 from Q1 2023 • BANT • Apr 25, 2024 10:00 AM
Cannabix's Breath Logix Alcohol Device Delivers Positive Impact to Private Monitoring Agency in Montana, USA • BLO • Apr 25, 2024 8:52 AM
Kona Gold Beverages, Inc. Announces Name Change to NuVibe, Inc. and Initiation of Ticker Symbol Application Process • KGKG • Apr 25, 2024 8:30 AM
Axis Technologies Group and Carbonis Forge Ahead with New Digital Carbon Credit Technology • AXTG • Apr 24, 2024 3:00 AM
North Bay Resources Announces Successful Equipment Test at Bishop Gold Mill, Inyo County, California • NBRI • Apr 23, 2024 9:41 AM
Epazz, Inc.: CryObo, Inc. solar Bitcoin operations will issue tokens • EPAZ • Apr 23, 2024 9:20 AM