Ignore Bob Lutz When He Talks About Tesla
Bob Lutz is in the news again — or at least reliably Tesla-hating Business Insider and CNBC — saying silly things about Tesla. Should we take him seriously? Should he keep getting quoted in the press? No and no.
Let’s start with who Lutz is. He’s an 86-year old guy who built and sold internal combustion cars for pretty much his entire career. He was head of product development at GM until he stepped down in 2009 at age 77, citing increasing regulatory pressures and skepticism about climate change. While in that role, the absurd Dodge Viper steroid-muscle car was developed, as well as the 1,000 HP Cadillac 16. Lutz loves gas-guzzling, loud muscle cars. And it was on his watch that the EV1 electric car was not only cancelled, but GM tried to get every one of those cars back to destroy them, leading to the documentary Who Killed the Electric Car? (which happened to be a stimulus for the founding of Tesla Motors). Apparently, Lutz converted to electrics late in life, but couldn’t get any electric cars through the Board of GM.
But then Tesla came to market and frosted Lutz’ shorts. Silicon Valley joining the car business was sufficient to get the Chevy Volt plug-in hybrid electric car to market in 2007, and it was a pretty decent little car. It pretty much got ignored by the press, however, which remained excited about Tesla vehicles and bored by GM vehicles.
Then he green-lit the Cadillac ELR. Basically, they took the Chevy Volt drivetrain, wrapped it in sparkly tinfoil, paid some ad firm to make an ad featuring the smuggest and most parodied character in car history, and started trying to sell it. And failed. And failed. And failed.
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Just before Lutz’ 2016 old-man-yells-at-clouds moment, GM announced that they were canning the ELR because it only sold 1,000 units in all of 2015. That’s not in a month, which would still be pretty pitiful, but in a year. No one wanted it. And it’s not like it was a terrible car — it just sucked compared to Teslas. Furthermore, every time Lutz turned around, Teslas got impressively better — 3.2 seconds to 60, 2.8 seconds to 60, Autopilot, Autosteer, Summon — while the ELR just sat there looking douchey.
So, what exactly did Lutz say back then?
On the Model X:
“The Model X appears to be unbuildable with those automatic gull-wing doors, which everyone in the industry always said were not going to work,” Lutz offered.
Meanwhile, the Model X is rolling off the assembly line at a fast pace. There was a 27,000 unit pre-order list and it’s outselling the much cheaper BMW X6 by a mile. Lutz’ cars might have made triple digits in pre-orders once. Of course, Musk admits that the falcon-wing doors were really tough, and likely they should have lowered their sights on the new tech for the Model X, but still, the car is here, it’s selling like hotcakes, and reviews for it are just as glowing as those for the Model S.
On Tesla’s business model:
“Tesla’s business model is upside down … their costs have always been higher than their revenue,” said Lutz. “They always have to get more capital, then they burn through it.”
Of course, Lutz has never built a business. He joined a business that was already robust and iconic and was one of the very top executives when it almost dissolved in the economic downturn and had to be bailed out by the government, something which cost the USA about $11.2 billion in losses. Lutz didn’t build a global business, he built cars in an already existing global business. He has no experience creating a global business, and the one he was working at exists because the government kept it afloat.
On electric cars in general:
“[T]he business has always been lousy. Now, it’s super lousy because the generic demand for electric vehicles is down. And here’s why this is going to kill Tesla: whether there’s consumer demand for electric vehicles out there or not, the major OEMs like Ford, GM, Toyota, Volkswagen, they have to build electric cars — a certain number — in order to satisfy the requirements in about half of the states. Those have to be jammed into the marketplace, otherwise they can no longer sell SUVs and full-size pickups and the stuff they really make money on. That is going to generically depress the prices of electric vehicles,” he said.
Lutz flip-flopped again, part of his love-hate relationship with the drivetrain which is going to kill his gas guzzling BFFs. Yes, electric car demand was slightly down in 2016, perhaps due to very low gas prices due to the low oil prices and perhaps due to people holding out for coming models with longer range, like the Tesla Model 3.
What’s he saying now? Oh, more get-off-my-lawn-you-damned-kids things, of course.
“They will never make money on the Model 3 because the cost is way too high. He’s got 9,000 people in that assembly plant producing less than 150,000 cars a year.”
Really? When Tesla actually is churning out 8,000 Models S/3/X a week, which is essentially over 400,000 a year?
“Tesla has no … tech advantage, no software advantage, no battery advantage. No advantages whatsoever.”
Yup. Just ignore that Tesla’s …
- autonomous features are the best production self-driving capabilities on the market,
- cars are the quickest production cars on the planet,
- Model 3 is outselling not only every other luxury sedan manufacturer by a mile but also all but four much cheaper cars in monthly sales in terms of volume, and everyone in terms of revenue,
- Supercharger and Destination Charger network is unmatched,
- receiving over a 1,000 new orders for the Performance version every few days.
Yes, it’s easy to see what Bob Lutz means. (Obligatory Poe’s Law warning here folks.)
And to cap it all off, he even tried to riff off of the famous Who Killed the Electric Car? documentary that he features prominently in.
He’s ignoring all of the announcements by people still in the car business about the electric vehicles that they will be building. He’s now yesterday’s man (more like last century’s man, actually) and is shaking his fist at the newfangled gadgets that are replacing the things he built.
And he’s ignoring the Paris climate agreement of 2015, which makes it clear that his personal skepticism of climate change is not shared by the world, which oddly enough accepts that the 98% to 99.999% of climate scientists who agree that it’s real, caused by burning fossil fuels, and serious know what they are talking about. They are pretty much ignoring the old white guy who used to sell fossil fuel burning cars, as they should.
He retired and pointed at increased regulation that was making his job tough in 2009. The regulations are just getting tougher. Internal combustion cars are dinosaurs that have already been killed by the comet of climate change, but like dinosaurs, it’s taking a while for the message to get to the brain, such as it is.
Electric cars are the future. Lutz is the past. And he’s cranky about it. Just ignore him.
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