Thursday, November 05, 2015
Bob Lutz is a long-time car guy who has served in the top ranks of multiple auto manufacturers. When he speaks about cars, he talks from experience. That is why this opinion piece focused on Tesla is a serious PR problem for the electric vehicle company. Lutz picks apart the economic and technology model of Tesla and predicts imminent doom for the business unless it cuts costs now. That is contrary to the vision of Elon Musk who believes in invest, invest, invest and someday profits will show. This approach depends on the forbearance of banks and investors whom Musk must charm as long as he can. To be fair, Musk doesn't see Tesla as a typical car company. He is out to save the world with an electric auto, but the world will ask who is paying the piper. There is no doubt the Tesla is the ultimate performance vehicle run only on electricity, but Lutz points out in a time of two dollar gasoline, there isn't much call for it. Tesla is teetering on a cliff and had better be prepared to respond before it pitches over.