A legendary car exec thinks Tesla is facing the 'trifecta of doom'
That sent the stock into a decline, although it now appears to have stabilized at around the $212 level.
Who knows if Wall Street is just holding its breath ahead of an earnings report in which Tesla will admit that it can't make its 2015 goal of between 50-55,000 vehicle deliveries (it has about 17,000 to go in the fourth quarter)? Regardless, a well-know and outspoken voice in the industry says that Tesla could be in big trouble.
Bob Lutz was General Motors' car guru before and after the company's bankruptcy. Before that, he put in stints with Chrysler and BMW. He's a car guy's car guy.
And writing in Road & Track, someone who's worried about Tesla's future.
"Tesla's showing all the signs of a company in trouble: bleeding cash, securitized assets, and mounting inventory," Lutz writes. "It's the trifecta of doom for any automaker, and anyone paying attention probably saw this coming a mile away."
He adds:
Lutz goes on to maintain that, despite his admiration for Musk, Tesla could be headed toward the same fate as nearly every other startup automaker in the past 100 years: failure.
I'm not so sure. Almost a decade ago, I also wrote about how Tesla wasn't long for the world. And although Musk & Co. went though several crises and flirted with bankruptcy, the company hasn't merely survived - it's prospered. I learned then to be very careful about underestimating Tesla's resilience.
That said, Lutz's credibility is immense. And without question, Wall Street is likely bracing for some bad news next week. What Lutz does contribute to the discussion, minus his more dire prognostications, is that Tesla is increasingly functioning like a real car company. For Lutz, that means it has to start thinking about selling a cheaper car and maybe even going with a hybrid strategy, adding a range-extending gas engine to its lineup.
A crazy idea? Musk would probably think so.
But it is a crazy idea coming from Bob Lutz.