There are people who look at a car as nothing more than a glorified appliance. It is merely a way to get from one place to another and they couldn’t care less about the brand or the horsepower or how it drives. If the car does its job, then it’s all good. And then there’s the cult of Tesla.
Tesla fans are typically passionate about their cars. They love their Teslas and can be raving fans for whichever model they happen to own, the company, and CEO Elon Musk. Even when things go wrong, Tesla supporters are sure to come to the company’s defense.
Former GM Vice Chairman Bob Lutz has pretty much had enough and went so far as to compare supporters to being members of a religious cult. In an interview with CNBC’s Squawk Box, he said,
“Tesla supporters are like members of a religious cult. 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.”
Lutz comes off almost mystified as to how Tesla and Musk keep convincing everyone to invest more money in what Lutz sees as an ultimately doomed venture. Asked flat out if he thinks Tesla is headed for bankruptcy, Lutz doesn’t hesitate to say yes.
The Cult of Tesla, despite its fervor, might not be enough to keep the company alive. Lutz points out that each big cash infusion only lasts a few months before it’s gone. He sees it as a problem that increased volume can’t fix.
He’s even skeptical of Tesla’s partnership with SolarCity. It might seem like all your neighbors are putting panels on their roofs, but Lutz compares the merger to “tying two sinking ships together for synergy.”
Despite Lutz’s view, shortly after his interview, Tesla has good news for investors. It reported its first quarterly net profit in over three years, largely due to $139 million in sales of clean car credits.
Musk said they’ve managed to reduce the costs of launching new vehicles so they won’t need any extra cash for their new Model 3. That doesn’t mean they won’t want to raise capital for other reasons, so he left the door open, just in case.
Lutz is having none of it. He insists that unless they’re recovering the costs of building a car when they sell it, they’re not going to make any money. Build more and they’ll only dig a deeper hole. Even a cult-like following of supporters can’t overcome those kinds of losses.