Wednesday, 19 September 2018

Former GM Exec Predicts Doom For Electric Car Company

GettyImages-968584408

top auto industry executive expressed doubts about the future of Tesla, Inc. (TSLA ). Bob Lutz, who held high-level positions at Ford, Chrysler, BMW and General Motors, told CNBC’s “Closing Bell” program that Tesla may not ever achieve profitability.
After months of controversy surrounding the electric car manufacturer, for reasons that both did and did not involve the manufacturing of electric cars, Tesla has drawn different forms of criticism which has caused its price of shares to fluctuate. Lutz questioned the company’s ability to produce its flagship Model 3 car at a high enough rate.
“[Tesla CEO Elon Musk]'s got 9,000 people in that assembly plant producing less than 150,000 cars a year. The whole thing just doesn't compute,” Lutz told CNBC. "It's an automobile company that is headed for the graveyard."
Production woes have dogged the Model 3 for some time. Tesla had to construct what is essentially a large tent outside its Fremont, California, plant to house an assembly line so the company could meet its goals. The company has shown increased confidence in its production process in recent months, opening up Model 3 deliveries to the general public and even offering expedited delivery for some customers.
The company is also facing a federal investigation stemming from Musk’s infamous take-private tweets, as well as a new line of competition. More established automakers like Audi and Mercedes have recently announced fully electric vehicles that could tap into Tesla’s corner of the market.
Lutz noted that those other manufacturers have solid enough footing in the traditional car market to handle whatever losses come with electric cars, an advantage over Tesla. He went as far as to say Tesla had “no advantages” whatsoever over those other companies.
Tesla did not immediately respond to an International Business Times inquiry into Lutz’s remarks, or the other recent controversies surrounding the company.

No comments:

Post a Comment