Former General Motors Vice Chair: I Think Tesla Is Doomed | CNBC
Вставка
- Опубліковано 11 кві 2017
- Discussing Tesla's soaring valuation as it briefly overtook GM as the largest U.S. automaker, with Robert Nardelli, former Chrysler and Home Depot CEO, and Bob Lutz, former General Motors vice chair.
» Subscribe to CNBC: cnb.cx/SubscribeCNBC
About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.
Connect with CNBC News Online
Get the latest news: www.cnbc.com/
Find CNBC News on Facebook: cnb.cx/LikeCNBC
Follow CNBC News on Twitter: cnb.cx/FollowCNBC
Follow CNBC News on Google+: cnb.cx/PlusCNBC
Follow CNBC News on Instagram: cnb.cx/InstagramCNBC
Former General Motors Vice Chair: I Think Tesla Is Doomed | CNBC
Who is still watching and laughing in 2019?
Me xD
2020
Theranos was working for 10 years. I don't believe Musk. He ism't a bancrubt thanks for grants from state for more than 10billions dollars.
Славянка Чистокровная true. Tesla stock is built on massive hype by their fanboys. Tesla doesn’t have the right infrastructure built for long term success. Not to mention their tax relief will be expiring soon
It's even funnier now HAHAHAHA
CNBC should bring Bob Lutz and “all his experience” back onto the show & let him watch this old interview live. How great would that be?
he would just deny.
This guy ran GM completely into the ground. He must be smart. He must be right.
Tesla market cap in 600 billion now
How much cars does Tesla sell, without the stupid investors the company already would have gone bankrupted. This man is totally right!
@@borisdoornebos3565 lol belive me electric cars are gonna tke over the world
@@kakarot5792 I totallly beleave to, but you can't take Tesla serious. It makes 340k cars a year, even Porsche makes more, and it is currently worth more than Toyota which makes around 40 times more cars. And the build quality of Tesla is so poor. So make a decision for yourself.
@@borisdoornebos3565 Tesla is not a car company , and where are GM and general motors now .
"They're dependant on government money." Says the guy from GM lol.
110 billion GM debt
🤣🤣 bail out anyone?
Government Motors
40 years of experience running the auto industry the same way, and into the ground.
Excuse you, *42 years of experience!
You know who that guy is? He's the Kodak managers who said digital cameras would never take off.
really?
Please enlighten me about your "facts". I have a few - the carbon footprint of an BEV is half that of an ICE over the life of the car. HALF. The batteries are 96% recyclable and the energy can come from anywhere and be stored. Gasoline, on the other hand, is burned once, pollutes and is thrown away.
Yup. Did you know that Kodak invented the digital camera and owned the patent? But, the ancient management was set in their ways and only knew how to make film. They were very good at making film. But they failed to see the end of their product and now Kodak is no more. This guy believes cars that run on a single-source fuel are going to win. I guess he would've thought whale oil was a natural, good product too...
Nope, artificial gasoline is a myth. Algae additives or ethanol is just that - additives. Shut off petroleum and gas cars halt. You're repeating a rumor started by the Koch brothers (that's gas is a good future fuel). No, you can't produce mythical non-petroleum gasoline cheaper than solar panels and no, you can't get energy cheaper from solar PV now - it's actually on parity with coal and actually cheaper than coal in sunny areas. Renewables are already directly threatening fossil fuels and boy is the oil industry spreading disinformation (like solar panel production is toxic). Solar panels produce energy silently and pollution free for decades and with an EV they can push your car. You cannot make your own gasoline. EVs are the way of the future.
Nope, gasoline is a very complex chemical, you can't put pure alcohol in your car and have it run (for long, anyway). It's a petroleum product forever and Amen. Even if you could make it from biomass - guess what? You're still burning a fuel and polluting! You can't even idle a car in a closed garage without killing yourself...so burning a fuel to push a car is a dead technology. I can easily make all the energy I need to push an EV from my ROOF! Silently, efficiently and pollution free. Now tell me again why acres of algae and the oil products required to make the algae grow are a good idea?
Who’s watching In 2019 and wondering where all the other manufacturers “300” miles range cars are.
No Teslas actually do 300 miles. Do a quick Google search for real world range.
@@rbkfan200 maybe you should too.
Daniel Huerter lol, I’m Norwegian. We have most Teslas per capita in the world. I’ve driven every Tesla under the Sun, S, 3 and X. Not a single one of them will do 300 miles in the real world. Not if you’re driving normally. Sure if you are going to drive 50 km/h on the highway, then maybe. But nobody drives like that.
@@rbkfan200 so you are saying theres a chance
Daniel Huerter haha well... not realistically. Many of my friends bought the Model 3 Long Range, but they’re struggling to get more than 250-300 km (155-185 miles) of range once the temperature goes below 10 degrees celcius (50 degrees F). In the summer when it’s around 30 degrees celcius, they get around 200-240 miles max. And this is the Long Range version of the Model 3. The Model S 100D goes a little bit further, but not anywhere near 300 miles.... Tesla are inflating their range a lot compared to real life.
This guy is wrong, I have a gasoline car and plan to replace it with Model 3.
@Chris H but for tesla thats not true they make money for each of their cars. They inhouse all their major components and they make profit on basically no spedning when people buy autopilot which no other automaker does.
Good luck when your warranty runs out.
@@bmw803 Not sure what you mean. Tesla warranty runs out after 8 years for battery. And the batteries are rated to last something like 500k miles.
My 15 year old car has 115k miles. The warranty is of no concern imo. The warranty on ICE is more concern - and I hate the whole thing now after buying a Tesla - from the irritating salesman to price haggling (ugh!) to pollution to the million parts that need repair to constant oil changes to going to gas stations and waiting sometimes in line to fill gas to everything else. Teslas are the future and only idiots will be sticking to their ICE like their guns. They'll eventually go away
@me the reason they lost money for so many years is the billions invested into their auto plants and their technology research for their vehicles because their actually innovating and not copying legacy automakers. Also they've been turning profits for 5 quarters now dispite the growth and addition of more factories so they do not have a flawed business model.
5 years later and this is more hillarius than ever.
"I think there is a world market for maybe five computers."
Thomas Watson, president of IBM, 1943
"Television won't be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night."
Darryl Zanuck, executive at 20th Century Fox, 1946
"There is no reason anyone would want a computer in their home."
Ken Olsen, founder of Digital Equipment Corporation, 1977
"I Think Tesla Is Doomed"
Bob Lutz, former General Motors vice chair, 2017
I think poor old Lutz is doomed.
Who would want to fly to Europe on a Jumbo jet when they could travel in the Titanic, or who would want to fly to LA from Chicago if they can go on the Super Chief. I don't believe Lutz even believes himself in what he is saying.
The media say that Tesla is a company run by a genius that can't be valued with the same metric as others. The same was said for a company called Netscape....the hangover was brutal.
However - Netscape had no revenue - Tesla is investing more as they earn hence the defizit - so your comparison is flawed, midly put.
If cars fail, SolarRoof and Powerwall are the future - buy Tesla stocks.
Your comparison to IBM is of course of the same nature...
Good luck selling a solar roof to me i pay 5.82 to 8.92cent per kwH for my electricity. In fact most people in north america saw their electricity cost go down. While you are fixated on tesla you are obiviously unaware that the energy sector is living real technological change. We are entering a world of cheap energy thru innovation. Not only your roof and battery as to compete with other sources of energy...it also as to compete with Chinese competition. Mildly put Elon Musk is a guru, but that dosen't make 1.8 billions of new junk grade debt go away.
Haven’t even gotten the million electrics promised by 2012 cause all you talkers are t buyers
and now tesla is the most valuable car company in the world, what an epic time to be alive
This guy is missing the entire point of Tesla-- Elon musk is shaking the entire car industry and forcing them to change, otherwise the car industry would never have moved.
bingo
He is deliberate. He knows Tesla is doing well and yet he calls all Tesla's every move a joke.
Sure but over time he will be right, Tesla is going bankrupt or at least the share price will be back under $200 within 2 years max
@@DieselDoggy429 haha let see...
Haha Elon musk isn't planning for Tesla to be doomed. Elon believes it will do well.
This reminds me of the time when Microsoft CEO Steve Balmer laughed at the iPhone. "A $500 phone, are you kidding me? There's no chance this is gonna sell in any significant numbers. Not a chance!". The rest is history.
It happens with every new technology, including the early automobiles, which "will never replace horses" until pollution helped change minds - crude city streets loaded with horse manure were unattractive compared to paved ones without horses.
In 1943, Thomas Watson, president of IBM, said ""I think there is a world market for maybe five computers."
One thing that I find interesting is that the prices of American made electric cars with charging stations 100 years ago, adjusted for inflation, matches the before-tax credit price range of Model 3s.
I wonder what would have happened if US electrification had moved faster and electric cars had continued to be developed for the past 100 years.
Yeah, but he is right to some extent. Only isheeps and those who don't follow tech buy iPhones. That's not the case with Tesla. Don't compare iPhones to electric cars.
@Lars Pallesen Well said bro, but with the intoduction of iphone 8 and iphone X (no fingerprint,no jack) i think they are not going to sell anything now😂 strvr Balmer was right bro
When Ballmer announced his retirement the stock price soared. That says everything about his stewardship
If it somehow helps you feel better to insult the hundreds of millions of iPhone owners, be my guest. But last I checked the iPhone is still the world's best selling smartphone. And that was the point.
This is the type of guy who said "ehh that internet stuff is just a fad, its doomed, how is it gonna make money?"
Twitter doesn't make money and its stock value is in the toilet. Facebook is still struggling. Snapchat is struggling to make money after its IPO.
haha! He negative comments are a good luck charm :-P
he's the type of guy who says the internet stuff is great, but who has a business case?
He didn't say electric cars won't work. He said Tesla won't work!
He isn't saying electric cars won't make money. He's saying this specific firm called Tesla won't make money.
He has no problem with the space, he is addressing problems of a specific firm within the space.
How is it that you were unable to understand him? He spoke in plain, simple English, which i'm guessing is your maternal language.
So far he is right....
This is a fantastic clip. It was clueless two years ago. It's hilarious today.
Haha, I’m watching this in 2020 and laughing at these old school “execs”. 😂
I bought Tesla stock 2019 and CRGE 2020 and am a happy camper.
2022 and these guys are still looking idiotic
@@rickhammond2473 Smart man. Hold until 2030ish
Bra 2022 😅😅😅😅😅😅Tesla is literally abt to deliver semis 😂😂😂these Idiots - old tymas with 40 years experience of old tech are the problem of this planet 😅
I sold my Mercedes to buy a Tesla. Once you drive a electric car you never want to go back to oil/petrol car.
Did you know that Mercedes has dabbled in electric vehicles in the past? They even partnered with Tesla for a while when developing the GT-S AMG E-Drive.
Almost everyone has dabbled with electric cars at this point.
The question is whose actually gone to market.
+WhalesTasteGreat
Both the SLS AMG E-Drive (I mistakenly called it the GT-S) and the B250e had gone to the market. However, they didn't sell well due to various reasons. Particularly, the SLS AMG E-Drive was a low production numbers model with an exceptionally high pricetag, while the B-class in general, regardless of powertrain, had no market appeal compared to the equivalent GLA, CLA and C-class vehicles.
I'll stick with Audi S4, love the supercharged engine although the Tesla S is quite nice.
A wise decision!
42 years of bad experience is a stupid video.
The great thing about this is you don’t need to argue. It’s all recorded and history will /has judged.
Why is he going on about Tesla needing Gov backing when GM got a gov bailout???
Hilarious dinosaur couldn't save GM in the past and has no idea of the future. Many said the same thing about Apple and IBM.
And netscape, and pet.com, and geocities, and altavista, and ask jeeves....if you don't make money you don't survive. Tesla do not even protect is intellectual propriety. That is hilarious ! Do R&D with suckers money and give the fruit to Toyota....
Yeah, like why would anyone want to hear what this old fool thinks?!
Robert Evans the guy is a climate change denialist and as of this last few months Tesla is running at a profit two quarts in a row and the price of their battery is going . The world has changed and the old guy has been proven wrong in less than 2 years
Robert Evans go home old boy
Who didn't lock the doors in the GM Alzheimer center ???
The same people who needed Hillary Voters walking the streets?
It's a GM door, your lucky the door can close nevermind lock.
pol1250 Elon got out you mad person
i never take the advice of anyone over 50 when it comes to technology....
cletus2941 bill gates
Elon is 50. This guy is stupid but so are many young TSLA bears.
I am driving a model 3 and laughing all the way.
GM is like Kodak with digital cameras. Kodak was the first to produce a digital camera then shelved it in order to continue their film industry! By the time they realised their error, multiple companies had cornered the digital camera market. GM will become a Dodo unless it can get fully behind the EV movement. Please, please, please keep Bob Lutz's number so you can rub his face it the results in about 5 years!
Do you know that Kodak made more money from royalties on their digital camera patents than they ever made on cameras and film?
Terje Oseberg, If that's true then why did they go bankrupt and have to sell their patents?
How many Teslas do I see on the road? At most one. I see millions of GM cars on the road.
+Adam Smith
How many years have GM been an vehicle manufacturing company compared to Tesla? Give Tesla few more years and you'll see for yourself.
Adam Smith:
“How many automobiles do I see on the road? At most one. I see millions of horses on the road.”
- Adam Smith, 1901
“HoW mAnY tEsLaS dO i SeE oN tHe RoAd? aT mOsT oNe. I sEe MiLlIoNs Of gM cArS oN tHe RoAd.”
- Adam Smith, 2018
Lutz sounds jealous. By the way, the Bolt is 35K and rated excellent. Fully electric and will get the tax break. That vehicle will pay for itself in probably 8 years in savings over a gas car. No gas, no oil changes, no filters or belts. Charge it up and drive on less than 3 cents per mile. Try doing that with anything else. Not even a motorcycle. It IS the FUTURE......
lutz seems worried he's not the top dog anymore
+picknngrinnin It costs about 1/3 as much to operate an EV compared to a fossil fuel car. The operating cost differences make an EV less expensive in total cost of ownership over the long term. Are you familiar with TCO?
+picknngrinnin A Toyota Camry gets about 30 MPG. At $3 a gallon gas and 15,000 miles per year, that's about 500 gallons of gas or $1500 a year. in 10 years, that's $15k of gas. An EV would use less than $5k of electricity over the same 10 years to go the same distance. So the difference in fuel cost is about $10k.
There are many EVs under $30k (admittedly including tax credits), so the Camry would cost about $5k more in total over 10 years if it sold new for $25k. (Camry: $25k + $15k in gas = $40k. EV: $30k + $5k electricity = $35k)
People don't realize how much, as a fraction of the price of the car, they pay in gas over the years. Gas is expensive, electricity cheap. Put gas back at $5 and it's much worse for the fossil car.
Mark Davis is right; the payback time is about 7 or 8 years. After that it costs less overall to drive an EV.
The above is for today.
Due to falling battery costs, EVs will eventually cost under $20k new, at which point they'll cost $15k less in total cost (including energy costs) over 10 years. At that point, few people will be buying fossil cars, purely due to economics.
TCO is about cost to the owner. It does not matter where a subsidy comes from. Should we put the true cost of gas in the equation as well instead of all the subsidies the oil business has for drilling, refining, etc.? Should we include the cost of human lives in wars for oil in the middle East like Desert Storm? No, the TCO is the cost to the owner regardless of politics, subsidies, rebates, etc.
No New battery needed. the battery will last longer than the car and still give you at least 80% of the initial range. Most new EVs will have 200+ range, so worst case scenario is 10 years from now you have an EV with 160 miles range.
EVs also have warranties just like ICE vehicles, so components failing is the same as ICE failing. I would be interested to see the data you have for inverters failing at a higher rate than ICE components. (a controller is the term for a DC powered EV. Those are usually only home built. I know because I built my own DC controller for my DIY EV conversion. All OEM EVs are AC systems with an inverter) Modern AC Motors can go 500,000 miles or more.
Loanward was being nice by only including fuel in the cost equation. Also factor in Oil changes, many more brake replacements since EVs have regenerative braking and rarely use the friction brakes, transmission lubricant change, spark plugs, distributor cap, radiator fluid and flush, fuel system cleaners, air intake filters, belts, timing, etc.
Think of all the time you will have on your hands to do other things? Maybe wrenching is your thing, and that is fine, and you will be able to do that for quite some time. No need to poopoo the future. The ICE age is nearly over and the future is coming so it is evolve or become extinct.
+Mark Davis. The Bolt may be excellent, but as far as I've heard, GM is making very little effort to promote it. It may get great range but it can't compare with the Tesla Model 3 for looks. In Europe the Bolt was badged as the Opel Ampera but now that GM has sold Opel to Citroen apparently there are no plans to offer it for sale generally. Even though reports say it has been well received, prospective buyers are finding them hard to source. It seems as if it is another case of a compliance vehicle to allow them to continue selling fossil cars rather than a real effort to move towards sustainable transport.
I come to watch this for a good laugh. Shouldn't this guy be sitting on his porch yelling at kids to stay off his lawn.
Two years from now this is going to be even funnier.
Lutz will be hanging out with the guy from b,Blockbuster talking about the good old days.
Oh boy
Rofl. I was right. Hilarious stuff. In 2021 they have 30% gross margin, Bob. Doomed? Mary is shaking in her boots.
Checking in December 2022 three years later and watching this is absolutely laughable Tesla is now dominating the market and worth almost as much as the next five car companies combined GM is on the verge of bankruptcy and Bob lite admits to being wrong af! And Tessa started shipping out the first semi trucks this month that gets 500 miles!
Thumbs up if you own TSLA stock. Just got mine the other day and looking forward to the future and not being sad (= HA!
See you in 5 years when TESLA is broke and you are sad again :)
Have fun losing all your money in 5 years.
Oh dear..
You must be doing well. TESLA (TSLA) is killing it right now with the model 3.
opened at 239.75 today ...
I am watching this in 2021 again! GM is reaching a black hole on their way to Neptune 😀
I wonder if Bob realized he was being recorded.
Who is still watching and laughing in 2020?
Who is watching this January 2020
Is he the same guy that helped manage GM into bankruptcy costing Americans $billions?
Who's Here after S&P 500 inclusion? LMFAO
I wonder what it feels like to realize that you were completely wrong on every single thing you thought you knew after doing something for 47 years. I wonder if he even knows now, even as the industry he helped build is getting bulldozed right in front of his eyes.
Yeah I truly find it fascinating when people are unable to shift their paradigm.
Poor old Bob Lutz, the petrol fumes are really starting to get to him…..Bob is not a big picture kind of a guy he is part of the auto industry that builds a dirty, fossil fuel burning, hundreds of moving parts internal combustion engine vehicles with built in obsolesce. That’s the best business model they can come up with!!!! This is so they can support their dealer network and sell billions in spare parts. The auto makers have made it so easy for a company like Tesla to exist and thrive.
I love my new dog, but also miss and cherish my old dog. Those cars were an absolute essential part of humanities climb. while their day is numbered, it's a bit disingenuous to speak as you do.
This gentleman is really from the last century. Tesla has
brought excellent product, new solutions and the consumers really want to buy
it. Competition tries to copy and follow what they are doing. This gentleman is
a reason why American automotive companies have died in 90s because they could
not compete with Germans and Japanese. Tesla has a very solid margin on cars sold;
however they invest heavily into R&D. Even with much smaller budget that
other big companies have develop a car for 21st century.
Actually Bob Lutz did a great job of enabling GM and Chrysler to compete with the Japanese and Germans. He worked at BMW before there and was partially responsible for the BMW 3 series. He also single handedly pushed the Volt inside GM and deserves credit for working to electrify GM vehicles.
That said, he's way off base on Tesla. Tesla is not profitable overall because they are spending hundreds of millions of dollars on research and development to make their innovative cars, and they're spending billions of dollars to build the factories needed to make Model 3 and the battery packs for them. They sell Model S and X at huge profits and should be able to sell Model 3 at a good profit, thanks to the cost reductions from a much simpler car with the Model 3 and cutting battery costs in half due to Gigafactory.
Peter Leng, Yeah, but you don't need to invest as much into R&D when your company is run by someone who actually has a functioning brain.
That's why Tesla is now worth more than GM and will continue to outgrow them. GM may not survive. Do you know that Tesla bought the NUMMI plant for only $10 million? GM actually thought they were ripping him off. LOL
Of course Tesla had to retool it and that cost a lot of money and accounts for their depreciation losses. This is what they keep quoting when they say that Tesla hasn't made any money yet. They're actually making a profit on each car, but when you account for all that depreciation, it looks like they lost a $1 billion last year. That's only because they've invested far more than that in equipment and infrastructure.
"Actually Bob Lutz did a great job of enabling GM and Chrysler to compete with the Japanese and Germans."
Uhhh, then why was Toyota's market cap at $200 billion when GM was going bankrupt? And why is GM only worth $50 billion today when they are supposedly so big? And what's Toyota's market cap today in comparison?
+Terje Oseberg I was referring to the time when Bob Lutz was at GM, particularly his early days. GM would very likely have been even less competitive without Lutz.
Many "experts" said Amazon, Google or Apple were doomed? Amazon still has many analysts scratching their heads in disbelief over it's business model. None of these Businesses were profitable in the beginning. What makes them successful is constant innovation and I definitely believe Musk fits that same mold. Look how Netflix has changed through the years. Yes, Tesla's stock will have huge swings but if one just waits and buys on the dips, my guess is, you'll retire wealthy. The aforementioned companies have created many wealthy investors and I believe Tesla will do the same for the farsighted ones.
This is glorious in October 21. Will be even better in ‘22 and ‘23.
Yes I concur, December 2022 checking is n.
Checking in 2 years later and things are ever better then ever for Tesla and GM is in the verge of bankruptcy 😆
Boy is this a fun watch after Tesla's 2018 Q3 numbers...
They are going down. Wait till next year. Soon they will be bankrupt.
Michael Lawn it’s 2020
Stock ratings on Tesla Improved .... current price $700+ a share!
"'beamed down from space to show us all how it's done'" Pretty insightful in hindsight Bob.
"They're highly dependent on govt incentives for money"
Tesla paid their entire loan back, WITH full interest.
So did GM, genius. What's your point???
I say, that didnt age well. Love the laugh at the end. I'm laughing too, all the way to the bank!
It's over Lutz ... find yourself a casket
Old dinosaurs that should've been fossilized by now. Tesla stock is based on future projections of revenue. The old dinosaurs love the internal combustion engine and they don't know it's dying. The world is moving towards renewables like solar, wind and energy storage. These guys will turn into oil one day.
ICE aren't dying, they're becoming more efficient. He knows the world is moving to renewables that's why gave us the Volt.
All the efficiency in a Volt comes from the electric portion.
You are very right, my wife has a Corolla Hybrid that uses half the amount of fuel as an equivalent ICE only. The win is through 2 things, 1st regenerative breaking recaptures some of the energy from acceleration, 2nd the DC motor offers instant flat torque from 0-40kmhr at > 90% efficiency where an ICE does badly. Also an ICE uses 20% of its fuel just to be idling which a hybrid mostly doesn't do.
Tesla's stock is overvalued like Apple's, Google's, and Trump's by late purchasers who don't understand econmics.
If you got in early, it's a long term good investment. If you got in recently, you'll need to flip it or have other assets and strong guts to get through the bursting bubble and the recovery.
You aren't counting all the fuel it uses. The fuel needed to generate the electricity is ignored. That makes for a nice equivalent mpg windown sticker, but is a misleading number.
Electric vehicles move the pollution and warming issues to the generating plants, where the fuel, primarily primarily coal, produces more emissions than the ICE they power, and is taxed at a lower rate per unit pollution.
Until those generating plants are replace with ones use non-combustion power generation the pollution/warming/limited resource issue won't have been solved.
Oh boy, it's gonna be fun to see another interview with Robert Lutz in a couple of years when hundreds of thousands of model 3's will be selling for 20%+ profit each year.
What about all the subsidies to Big Oil? Government should spearhead new technologies because big monopolies are too powerful for anyone to compete with.
"Mercedes, VW, BMW, Audi, GM coming out with 300 mile range electric sedans" havent seen one yet that can compete with Tesla 😅
Still not
Where did he get his info that Tesla looses money on each car? I read and saw in a video on CNBC Tesla has a 22% profit per car. That is when only cost of labor and materials are considered. Naturally cost of expansion eats up profit. This seems like lies to me.
Tesla lost money last year as every year so far. Only some Tesla fans with apparently minimal insight into finance thinks they did not. Elon Musk certainly doesn't claim they are profitable - although Tesla has at times used suspicious "gross profit" numbers outside of their formal, legally-required financial filings.
You are quite right that it's useful to separate the costs of expansion from the cost of operations. But it's not that easy in practice, and really there's a huge amount of latitude for a company to account for the same reality in different ways. Tesla has never explained exactly how this gross profit figure arises, and so you should be very skeptical of it.
Corporations do in fact have to distinguish between capex and opex (look them up in a financial dictionary) and Tesla reports their operational result as a loss: goo.gl/Iatl1z
But they consider themselves a start-up still, and I see no reason to argue with that. Elon Musk thinks bigger and longer-term than the typical corporations do (but isn't alone; Jeff Bezos and Amazon is another, as it were, Prime example!) and so far the market has proved willing to fund a long period of establishment and expansion rather than chasing quarterly results.
Well now I'm going to challenge you to stop spreading misinformation. Tesla is including R&D in opex. That's why their profit is negative. Most car makers amortize R&D into COGS, which makes them look more profitable in the short term. Every Model S and Model X is sold at a large unit profit.
Loanword Eggcorn - R&D is not operating expenses. Its capex. Then Tesla is foolish. They're spending every dime they make in profit building oversized battery factories in the middle of nowhere. Maybe use that money to be building better quality vehicles. Customers are getting deliveries of cars with failing doors, cracked A-pillars, etc.
AceSKYwalker does GM invest in infrastructure like gas stations that they own? did you bother to think how utterly ridiculous your statement was? some companies actually invest in the future not just the present. I know.... what a crazy idea.......
What? Tesla is spending its money on a flipping battery factory in the middle of nowhere. They ought to be spending the money improving the quality of their products. Like I said, failing doors, cracked A-Pillars. Body panels that take weeks to months to show up at the repair shop if you get in a wreck in your $70,000 Tesla.
You (Tesla) know you're doing something right when people like this backward-thinking gentleman speak so vociferously against you. I respect that he has 42 years of business experience, but I think (I hope) he underestimates the strength of support and desire for companies like Tesla who's sole objective is not just to make profit for profit's sake (of course profit is important but there should be more to it than that - but then, perhaps I'm just a misguided fool dreaming of a better world).
mattvjmeasures I think he’s just being a bully since he’s older and (wiser). Elon is so young. Maybe this man jealous.
Wow o 2020 Tesla 😎
Your not... you are spot on, people nowadays long for ethical corporations with more than just a motto by an actual mission for the betterment of us all.
He also does not believe in climate change! How this guy ever got to be CEO of GM shows these guys don't deserve the wages they get.
When you're from the stone age you think that Tesla is just a car company lol
47 years in the industry and this guy doesn't understand that this car will sell for much more than $35k? Everyone is gonna add features. The car is estimated to sell for around $43K. Also, battery cost have come down since tesla is producing them. Not to mention YES, it is cheaper to make the model 3. Less wiring, smaller battery, less displays and less overall technology.
I expect mine to be about that price (around $43k) since I'm going with the larger battery. Then later on I'll get the autonomous features activated....pure profit for Tesla when people do that.
Im guessing mine is also gonna be in the mid $40k.
yeah the 2nd one, but the base will be 35k
32 seconds is literally all I could tolerate...
I love how the announcers keep calling Tesla a start up - buts been around for 12 years! Do these news anchors do any research?
Elon is gonna go for Uranus next Bob. And it's gonna hurt real bad when he parks his rocket in there.
funny how the ex GM boss vue of car manufacturing is still like 1998......
Lol he said tesla depends on subsidies for buyer. Government completely bailed gm out of bankruptcy
Says the guy who depended on government bailout to save his car company. Come on, Bob Lutz.
others are coming with 300mile range evs, but they are still just coming...when they arrive, let me know
This guy is really clueless. He looks like such a fool now and he's supposed to know about the industry.
Now, legacy auto manufacturers are selling EVs at a loss. 😂
For those watching in 2019 and laughing u need to try watching in 2020 feels much better 😂
I am watching it in 2022
@@neelofazrathnow in December 2022 lol
July 2020, TSLA stock is around 1400$ and all car manufacturers are now following the EV path build by Tesla ...
Tesla's stock history reminds me of Amazon
2020 yup!
This video is 2 years old... Still waiting on that "competition" Bob.
4 years now. Still waiting...
Q4 2021, Tesla sells 300k evs while GM sells..... 26
This clip reminds me of Steve Ballmer going off on the iPhone when it first came out. "It doesn't have a keyboard!!"
When you live in a paradigm for so long , it's hard to see when the paradigm is changing.
Some years later.. Elon is having the final laugh 🤣🤣🤣
And then here we are today. Tesla was a risky idea, but so was Amazon and Starbucks with the same model.
This video is like a wine. every year it will get better.
Whoever believed cnbs or this smart pants 👖 would lose their shirt and underwear. What a show.
He's wearing adult diapers. Doesn't affect my opinion at all, just figured I should share that with everyone here.
5 years later…
🤣 dinosaur became extinct.
People retire because it’s time.
Funniest thing I've ever heard 😂🤣. Who's still watching this in 2020 after stock split!! 🤑
I'll watch again later this year after the second 3:1 stock split hahaha
Did Henry Ford make a profit 10 years into his company when he first started Ford, I think not. Really funny how every Chevy Bolt is being sold at a loss, pot calling the kettle black!
Was Lutz the one who shut down GM manufacturing in Australia? All because it was in competition with US GM manufacturing.
" If it hasnt worked in the past, It wont work in the future."
Dinosaur.
Do you have an actual source that FORD was unable to make a profit in 10 years of selling cars?...I think not.
Actually he did and he didn't need government tax breaks and loans to do it.
He admitted they sell them at a loss, he also stated they have large market share of other sectors that can absorb the loss, which Tesla does not. Maybe the whiplash from the acceleration in your Tesla broke your critical thinking skills.
Who is still watching this in 2020 and laughing hahahahahahaha
TSLA @ $2K today. Great job, Bob.
I'm watching in 2020.
"we'll see". We'll, we've seen, Bob. You lose. It's embarrassing how wrong he is on so many levels.
Robert Lutz what a joke. I need to remember that name when I want to lighten the mood
This aged well, lol
whos still watching and laughing in 2021 lmao
This is one of the most inspiring videos on the youtubes! This old, incompetent fart of a human being can't even think past his own extended gut and yet he somehow became rich and successful. Any one of us can do it!
sounds like somebody is scared of the future to me! 😱😂😂
All those analysts/individuals criticizing Tesla now in 2022 will in retrospect look as foolish as Bob Lutz in this 2017 interview.
Who is laughing in 2020 after battery day?
This gets funnier every year. 🤣 2021
I have to agree with those who say Teslas valuation is unfounded, or at least founded on hope more than anything more solid, but Bob Lutz' comments in this clip aren't exactly shedding light on why the man is considered such a towering figure in the auto industry.
There's no cost advantage to the gigafactory?? Of course there is. First of all, nobody has ever made the cells and battery packs in one location before. That in itself represents considerable time savings, and time is money. Secondly, scaling up on the inputs and the output does lower unit cost. It is true that simply making it bigger doesn't deliver radical savings, but on the other hand Teslas projected 30% savings seem conservative.
Listening to Lutz, you'd think Musk and the investors were total idiots. OF COURSE they do not plan to sell Model 3 at below the cost of materials and labor. Lutz didn't say that directly, but he sure implied it since without that assumption his comments make no sense at all! What Tesla actually has projected is 20 billion in revenues and 5 billion in profits from the 400k Model 3 reservations. I personally will be positively surprised if they manage to deliver that sort of profit, but I doubt anyone will know, at least not for many many years to come, since like now their gross profit will be largely a consequence of how they choose to do the accounting and very difficult to scrutinize. It's not like Teslas expansion plans are at the end - they have already been talking of a Gigafactory 2 and another car plant in China. The rumour mill is even discussing GF 3, 4 and 5 already, and though that may be just hype there's little reason to doubt Tesla will build these as quickly as possible provided the demand is there to justify their existence and enough cash can be generated or raised (or probably a combination).
I think Tesla may well succeed in becoming profitable and grabbing significant market share in the "entry-level luxury" segment. But it is much harder to justify the valuation, considering that GM made over 10 million cars and 9 billions of profits in 2016. On the other hand the growth potential in battery storage and solar cells is *huge*, so it doesn't seem impossible for Tesla to someday become so profitable as to justify the share price. But as already mentioned, to me this seems founded more on hope than anything else.
The one good point Lutz makes is that other manufacturers can create pressure on margins if Tesla is proving very profitable, by offering competing cars. Judging by the EVs currently on the market it's not clear to me that Tesla has any significant technology lead - although they clearly have a big image lead. But the late-comers may find it difficult to source enough batteries if they suddenly want to make EVs in volume. After all, that was the original reason Tesla decided to build the Gigafactory - not because they would lower cost, but because nobody could supply as much as they need for Model 3.
Even though I think Teslas valuation is crazy I am glad that it is. Investors being overly bullish certainly makes it easier for Tesla to raise capital and gives it added importance to suppliers, who have to take into consideration that Tesla may be much bigger in just a few years.
Shanghai Auto next week will bring a few glimpses into the future, and Audi will finally show us something electric that isn't an SUV. Then Ampera-e launches in Europe (Norway) in early May. The next generation LEAF debuts in September and goes on sale shortly after. 2017 will again break all records for EV sales, and the pace will increase again in 2018. However Tesla fares, EVs continue along the disruptive technology adoption curve, and in the next decade they will begin to go mainstream in several big markets (likely the EU, China and India, and probably the US despite the Trump slump some expected).
on the other hand Bob Lutz isn't your ordinary critic, he knows the automotive world better than any of us... one thing is true is that Tesla has created their own bubble with their stock price and like all bubbles its going to burst...
Tesla is one of the most unreliable car brands currently available so i'm very interested as to how the Model 3 is going to be received by people..
Bet you look back at Tesla stock price when you made this comment and wish you bought some.
@@dunhillsupramk3 The bubble x10 since you made this comment, how does it feel to be so wrong?
The title of this vid needs to be “strange animals being funny…you’ll never laugh sooo hard!”
Ironic that GM has now teamed up with Tesla to utilize superchargers in their new and existing cars. This aged well!
I bet any amount of money if he test drove a model s, his mind would change.
I bet you he owns a Model S 😉
I always kinda of liked Lutz, But he is bitter. The operating cost of a 35K fully electric car will pay for itself in savings verses an gas vehicle in probably 9 or 10 years. Once folks figure out the electrics and realize they could take those savings and get a beach condo or cabin in the mountains. Then you will see real traction for electrics.
Lot of people don't keep their cars for 9-10 years. The kind of people that can afford Tesla's (even the Model 3) will keep their car for 5-6 years at most. Maybe even less, since Tesla's cars are like consumer electronics, each new revision will have new features that everyone will want.
AceSKYwalker if it has a low cost of ownership that means resale value will be better then a gas car. so it won't matter if you keep your car for 10 years
Now it's more valued than Toyota, Probably the only company to profit in this pandemic
In 2021, Mary Barra's is underrated for focusing on quality, by providing constant recalls and giving Bolt owners with brand new batteries every two years. Amazing quality and customer service. Tesla will never match GM's quality!!!
Couldn't help but laugh all the way through this...old white guys lol.
This thinking is why Trump won astoundingly.
Ace;
are you already sure that Trump will turn out to be a success?
old guys tend to have more experience than young people - you know the ones who think they know the solution to everything at the age of 22. and what's being white got to do with it?
It's not a white thing, just an old thing.
First car manufacturer to use aerodynamic: Dusenberg
First car manufacturer to do a front wheel drive: Corb
Are they still around ? Nope the old white guys got them. Do you have the money for a model S ? Work hard then because those glorified golf cart won't be around for long if you don't fork the money to buy them....
The old man forgot 1 thing. No one else has a charging infrastructure. Chevy Bolt sales are tanking at less then 1000 / month.
darkpill also Mercedes and Toyota invested in tesla
"...we're going for Neptune and Saturn..." Yes those are gas giants, there is nothing to land on, you'll just fall through and get crushed by the pressures...how do I turn this into a metaphor?
Watching & laughing in 2021 😂 will come back in 2026