Elon Musk described as "a new visionary god."
Former General Motors CEO Bob Lutz has criticized Tesla’s fans and followers, and the company’s founder and ideologist Elon Musk. In a recent interview to CNBC, Lutz described Tesla owners as “members of a religious cult.”
“Tesla supporters are like members of a religious cult,” Lutz told CNBC's Squawk Box. “Just like Steve Jobs was worshiped at Apple, it's the same way with Elon Musk, who is seen as a new visionary god who promises this phantasmagorical future, a utopia of profitability and volume.”
Not only that, but Musk “hasn’t delivered a thing”, according to Lutz. “The only problem is, Steve Jobs delivered and Elon, God bless him, hasn't delivered a thing, except increasingly negative cash flow, and an increasing lack of profitability; more and more capital spending.”
Despite the negative comments, yesterday Tesla released its third quarter financial results, which show a net income of $22 million. Also, the Californian automaker reported an increase of 114 percent in total deliveries over Q3 of 2015 with 24,821 sales.
Still, Lutz believes Tesla’s business model doesn’t have bright future.
“I just don't see anything about Tesla that gives me any confidence that that business can survive."
"The last time I checked, [Tesla's] quarterly cash burn is about $250 million for a company that size, that's horrific. Every time [Tesla] gets a $500-million injection from a new stock sale or a $750-million injection of new money, it lasts them two or three quarters. This is a problem that volume can't fix.”
Lutz adds: “If you're in a variable loss – that is, you're not recovering labor and materials in your sale price – then doing twice as many, or three times as many, or four times as many [sales] doesn't help. The losses just get bigger and bigger.”