Bob Lutz Asks Whether Tesla Is Doomed, Seems to Have His Mind Made Up Already

Bob Lutz on Tesla 1 photo
Photo: GM Media modified by autoevolution
For those of you young enough not to remember who Bob Lutz is (what are you doing on the internet if you’re three, by the way, shouldn’t you be making sand castles or something?), he was one of the leading figures in the US automotive industry.
His last major position was that of General Motors executive, but he’s tried other major carmakers before that, with names like Ford or BMW springing to mind. It’s safe to say he’s pretty serious about his involvement in the automotive world and is now the co-founder of VL Automotive and chairman of VIA Motors. Remember this last name, as it’s pretty relevant to this story.

Bob Lutz isn’t a stranger to electric vehicles either. Actually, during his time at the helm of GM's product development, he got the nickname “the Father of the Chevy Volt,” so it’s hard to credit him as inexperienced in all matters related to EVs, but it’s also impossible to imagine he’s impartial.

Especially since one of the two companies he’s involved with right now, VIA Motors, buys basic vehicles from GM, converts them into EVs and then sells them for a profit under the VTRUX brand. Yes, you got that right, most of them are trucks, but they also offer vans and SUVs.

That doesn’t make him a direct competitor for Tesla, but it does cast some shadow over his impartiality, especially when his ties with GM (and the Volt model) are being considered.

Anyway, in an editorial published by Road and Track, Bob Lutz lashes out at Tesla saying it’s got one foot in the grave and it doesn’t even know it, or refuses to acknowledge the fact. According to Lutz, Tesla has three main problems: “bleeding cash, securitized assets, and mounting inventory. It's the trifecta of doom for any automaker[...]” And then he goes on to list some more.

Let’s take them one by one.

#1: He says Tesla customers are running low.

I’m not a market analyst, but it’s been my impression that Tesla Model S sales are going up. What would worry me a little if I were Elon Musk, however, is the underwhelming welcome the Model X has had. The electric SUV doesn’t appear to be a game changer, and it wouldn’t surprise me if the Model S remained the top selling Tesla model for the years to come. A cheaper, smaller car, however, could find a lot of adepts, especially in Europe.

#2: He argues the dipping cost for gasoline isn’t helping Tesla’s case.

Well, Tesla never did present its cars primarily as cheap to run - even though they are. People who buy EVs do it more like a statement, and in Model S’ case, because it’s tremendously fun. The price of gas shouldn’t have a true influence on Tesla sales.

#3: He says that when the big names enter the EV game, competition is going to ruin Tesla.

This is a bit trickier since it’s really hard to predict. What’s very clear is that Tesla has built a strong group of followers who would have to be very disappointed by Elon Musk’s products to defect to another brand. Right now, I think there’s room for everybody on the EV market since the offer isn’t really that great - it matches the demand, though.

#4: He says, quoting from his experience with BMW in the ’70s, that a distribution relying solely on company stores and no dealerships is a sure recipe for disaster.

Well, somebody should tell Lutz the ‘70s are very different from the 2010s, and will be even more different from the 2020s. More and more automakers are taking their business online, getting ready for that moment when we’ll be buying cars from the sofa, so distribution is the least of Tesla’s problems. There are so many ways of getting to know a car without actually driving or even seeing it in person, that you only go to the dealership when your mind’s already made up and your money’s in the bank. Surely a trip of a few hundred miles to get yourself a new car isn’t that big of a nuisance.

Bob Lutz sees two solutions to Tesla’s worries: cutting costs (and a dealership network would do that, he says) and coming up with an entry-level model, a small car that’s fun to drive and uses a smaller battery pack and a gasoline engine for range extending purposes. Wait, what? A Tesla you can put gasoline in? Is Bob Lutz trying to tell Tesla that the Volt is a better car? I think he is.

He is aware that such a move would dilute the Tesla brand, but if you ask me, it would downright kill it. It might not destroy the company itself - hell, the new Tesla might even go on and prosper - but it would cease to be the Tesla we know and love or love to hate, depending on which side of the barricade you are. I know it sounds romantic, but I think that if it came to that, Tesla should die fighting for what it believed in from the get-go.

Lutz gives the example of Porsche, a brand once renowned for its rear-engined sports cars. Nobody wanted them to switch the position of that engine, not to mention build an SUV, and yet it happened, and it saved the company. What Bob Lutz is missing is that, unlike Tesla, Porsche is a large corporation run by greedy men who get their paychecks from even greedier men. Porsche stopped being one man’s dream a long time ago. Tesla still is, and no corporative crap-talk about profit and cost-cutting can change that. For now, at least.
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About the author: Vlad Mitrache
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"Boy meets car, boy loves car, boy gets journalism degree and starts job writing and editing at a car magazine" - 5/5. (Vlad Mitrache if he was a movie)
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