Lutz says SELL Tesla stock

like Lutz didnt run GM into the ground, and bailed with his money leaving shareholders out in the cold.......so far Elon hasnt done that...

 

I agree. Tesla has a steep slope to climb with electric cars/infrastructure, but Lutz was a failure and has zero credibility, IMHO.

 

Personally, I feel Tesla has been, to date, a triumph of hype over reality.

But, people, IMO, are investing on the HOPE that it will be a grand success. They have lots vested in that success, and it's hard, maybe, to accept that Tesla may be nothing more, in the long term, than an acquisition candidate for a big manufacturer (possibly an addition to the product line-up) or a total flame-out (the more likely scenario?).

Regardless, there's enough access to cash to keep this game going for a while longer.

CW

 

"Lutz a failure with zero credibility?" Ever read his resume?

 

What car company started in the last 10 years has done better than Tesla?

 

That's kind of the point...

It's not an easy thing to start a car company. Many have tried. And failed. Miserably.

And, while stock prices may indicate and reflect investor optimism, the painful reality is in the financials. Net income has steadily gone in the wrong direction on a quarterly basis (to a loss of $154MM in the most recent quarter).

AFAIK, the company has never turned a profit. At some point, it needs to. Shareholders are the residual claimants, and if there's nothing there, the equity will be worthless. Unless, of course, this stock (like some other money-losing internet companies) trades on some other multiple (revenues, EBITDA, etc.). Even so, perpetual and indefinite losses are not encouraging.

The company has $1.5B of cash, so it can go a bit longer (at that burn rate, ten quarters).

We'll see...

CW

 

Before I comment, would you please clarify what you mean?

CW

 

Lutz was vice chair of product development from 2001 till the crash aftermath. He had 7 years to deliver competitive products for GM. Then he left the mess behind complaining that the government wouldn't let him make the cars he wanted, as though everything was all roses prior to the 2008 meltdown.

BTW, Lutz championed the Volt and was a big proponent of electric cars.

Not a good guess.

 

Two versions of the same snake oil salesman.

Very mixed feelings on Lutz. Sometimes he seems like a very experienced insider that isn't afraid to speak his mind even if that goes against the grain. Like that Lutz overall. Other times an arrogant jerk that talks down to his own customers because HE knows better what you want or need than you do. He is also without question a self-serving corporate man when he needed to be, and has no qualms about spewing the company line if it serves his purpose. That is the majority of my opinion of him, not favorable.

Elon Musk has so far been a darling of the press as well as the small customer base for his cars. In reality the death of Steve Jobs probably helped him more than anyone, an ignorant society needs someone to focus on that they think will solve their problems, or at least distract them with a status symbol/toy. Musk's MO so far has been a lot of big talk and promises, although it should be said in some cases he has delivered. He is so good at selling in fact, that grown men that should know better convince themselves it is not an inconvenience to own a Tesla, ever. They convince themselves that paying six figures for what amounts to a very powerful Camry is a smart thing to do. In many ways the Model S is indicative of the values of their customers, and that is not a compliment. His gigafactory will never be as giga as he claims, nor will a full electric vehicle in the $30-35k range ever happen with acceptable range. I think I dislike the obnoxious air of his devotees more than him though. He is obviously a smart guy, not sure at all about the people that keep buying his vehicles. Is Tesla overpriced as a stock? In pure technical terms I don't know how anyone can argue that it has room to rise in price but since the market these days is basically another form of gambling, who knows.

 

All good points. I am extremely curious about the model 3 that will be released in '16, which I believe is supposed to be the bread & butter of the company. One of the MDs I manage has the performance S and I was left quite impressed after driving it. I have a 60 mile commute, if the 3 maintains its $35k price point with atleast a 200 mile range and 0-60 around six seconds I am in...and I imagine plenty of others will be too.

 

Detroit was run into the ground by WALL ST" - seriously! Wall Street ran Detroit into the ground??? What other awful things is Wall Street responsible for? Deflategate? Perhaps. The Kim Kardashian sex tape? Definitely!

How about the fact that for years they made a ton of crappy vehicles with designs that often made soviet military trucks look stylish? How about the fact that after years of comfortably and lazily relying on Americans buying their cars out of habit and familiarity, by 2006-2007 they had pretty much lost even Middle America to asian and european competition? Funny how those competitors were able weather the economic downturn just fine...

Tesla may fail but that would be ok. That's capitalism. If Detroit, however, had had Tesla's vision, energy and guts it would have been in a completely different spot. Speaking of Lutz, his baby, the Chevy Volt, was a great idea that was doomed by a typically bad GM execution...

 

But if it is $44k, 0-60 takes 8+ seconds, and at that price the battery gives you 130 miles, still in?

I can almost guarantee the Model 3 will be available in stages. The cheapest may very well start under $40k, but it won't be a car anyone will want to own. By the time you add any options or a battery capacity that gives decent range, it will be $50k OTD.

 

IMO, the Big 3 were like dinosaurs. They were perfectly adapted to the environment. Gas was cheap, unsophiticated consumers wanted big cars for their big bodies and broods. The result was SUVs and trucks of varying quality and generally poor driving enjoyment. SUVs at the exclusion of small efficient vehicles for the most part. I cannot recall a single stylish upscale car from any of them that got 35+ mpg. Not that anyone would have bought them at that time anyway. Credit and gas were cheap.

They made millions (billions?) in profits from these vehicles over several years. The UAW (an organization which had outlived its purpose in the 1960's IMO) saw these corporations making tons of money and demanded most of it for the employees. In some cases strategically striking supplier plants to shut down assembly plants. A giant game of chicken with the corps. The coprorations promised lavish (I can say this as retired UAW is in my family) LAVISH benefits for health care and retirement for the workers and their families.

Then gas started creeping up at the same time RE prices also were climbing. $2. $2.50. $3. $3.50. People started putting off the purchase of a new Tahoe, they just paid way too much for a 1100 sq ft s***box house and the pinch of monthly mortgage payments was being felt. Still the automakers thought this was a temporary setback and soon they would be backlogged for 6000# trucks again. But just in case they would release a few crappy small cars, make sure the tactile interior surfaces are horrible, as well as disregard the NVH of the vehicle. Dump a gutless thrashy engine in that Malibu while they were at it. We wouldn't want people actually keeping these cars, give them junk so they want to trade in for the Durango next year...

But the asteroid that finished off two of the three was Lehman and the 2008 meltdown as stated earlier. Credit was slushy from a demand side (not QE). No one was spending $60k on a new dually when they might lose thier job the next day. You might say they were unable to adapt, I would say they had sewn the seeds of their own destruction during the good times. Those lavish benefits for employees were still there, without the sales to support them they ended up bankrupt.

BTW, as the only "survivor" of the crisis among the three, I wonder how much market share Ford picked up from GM and Chrysler. I know some people that refused to ever buy a Government Motors vehicle.

 

I have a very good understanding, and as a former GM shareholder I lost $$ on the alleged Lutz legacy...how much money did you have invested in GM?

 

I may or may not "have zero understanding on how the recession came about". That's irrelevant. What is relevent is that the recession was a shock to a whole lot of sectors including the auto industry. Many car companies struggled and survived. A couple failed because they were, as another poster noted, dinosaurs that had failed to evolve. That's the root cause for their issues...

 

We can label them dinosaurs for their SUV, pickup truck, gas guzzling sedan ways. But the fact of the matter is that SUVs were the most profitable part of the market. In fact it was so profitable that the "smarter" companies from Germany and Japan worked like mad to get a piece of it -- it's why Porsche is still around.

Lutz was all for increasing the price of gas through taxation (something like 25 cents/year, I think was what he proposed, so that the US would consume less oil.) But the government simply didn't want to hear it. At some point, bad timing is simply bad luck, IMO.

I also think that it's a bit fallacious to blame industry for the consequences of both government intervention in energy and whatever volatility in the field can be attributed to their treatment/tolerance of tyrants in oil-rich regions.