Bob Lutz and his latest Tesla comments...

[James Anders]

At one time, I had a great deal of admiration and respect for Bob Lutz. He made some great contributions back in the day.

However, his latest Tesla rant was shameful. Either he's clearly not the person I thought he was, or he's just acting as a shill (paid or otherwise). Or, he's not aging well.

Here is his most oddly, lame and silly comment...

"There's no secret sauce in Tesla," Lutz told CNBC. "They use the same lithium-ion batteries as everyone else."

Duh. As if that means anything.

Why not....

"There's no secret sauce in SpaceX. They use liquid oxygen and RP-1 as everyone else."

Or...how about Lutz saying this in 1977,,,

"There's no secret sauce in Apple. They use integrated circuits and resistors as everyone else."

Or perhaps...

"There's no secret sauce in PayPal. They are just a web based company as everyone else."

Or maybe right after the introduction of the iPhone (which reset the design for all other phone companies)...

"There's no secret sauce in the new iPhone. They use the same basic components as all other manufacturers."

Clearly, Lutz should know that creating a truly great product is much more than choosing commodity production items. Sure, there were electric cars before Tesla. Sure there were lithium ion batteries before Tesla. Yes, Tesla is spending a lot of money. But innovation and changing the order of things is inherently risky. You know, Bob....like flying a jet fighter plane.

Perhaps you can think of other examples?

 

[idealsol]

There’s no secret sauce in Amazon, just another online retailer

There’s no secret sauce in Nvidia, they just make commodity graphics cards, correct ?

 

[BluestarE3]

Sad old guy trying to remain relevant in a world that he once sat atop of, but that has now passed him by. He'll say something that's provocative so media outlets will quote him as an "industry expert" and he'll bask in the limelight for a few more moments... until he needs his next fix of publicity.

 

[Aieukl378]

I literally look forward to his CNBC appearances for comic relief.

 

[sandpiper]

No doubt he’s got a bit of a personal grievance with Tesla. But be careful about dismissing him completely. He’s a guy who has spent s lot of time looking at financial statements. And automotive is about narrow margins, tight cost control, and smooth execution. Tesla has struggled on all of these items.

Tesla is probably as much (or more) at risk then it was in 2012 when it just about went broke. If the don’t get the 3 production up soon, the wheels might start coming off of the bus.

 

[Merrill]

Just like lots of dinosaurs running companies they cannot seem to think out of the box and look to the future, Koch brothers are good examples. Let’s keep burning coal because that is what made us our money instead of hey let’s diversify and buy some of the green tech companies and hedge our bets. Their heads are in the sand!

 

[SMAlset]

There are hundreds of Model 3s out there driving around already. Does anyone really think that these cars aren't going to be produced? I venture to guess that the vast majority of reservation holders are happy to see the car and know it's being refined before they get it and more than willing to wait for it. Of course some will have to buy a car sooner due to accidents, lease expirations, old cars dying, etc. but I believe that will be a small percentage compared to the whole. These "competitors" and analysts who have stakes in the game, are trying to sew seeds of doubt/discontent and are recognized for doing so.

Merrill, as to your comment I am sure big oil company for example have bought out green energy companies just to take their innovations and then close them down. One of the marketing principals I remember from college was if you can't compete, buy out your competition. At some point though people have made the conscious decision to support greener alternatives so eliminating the competition in that fashion starts to fail.

 

[James Anders]

No doubt he’s got a bit of a personal grievance with Tesla. But be careful about dismissing him completely. He’s a guy who has spent s lot of time looking at financial statements. And automotive is about narrow margins, tight cost control, and smooth execution. Tesla has struggled on all of these items.

Tesla is probably as much (or more) at risk then it was in 2012 when it just about went broke. If the don’t get the 3 production up soon, the wheels might start coming off of the bus.

I don't normally dismiss what Lutz has to say. As I said, I have held him in fairly high-esteem in the past. It's just that this most recent secret sauce comment is so bizarre.

Yes, we know Tesla is spending a lot of money. If Lutz simply commented on that, fine.

But we know why Musk is spending. He's building something new from the ground up. New cars, new tech, new business model. He's acknowledged that lithium batteries were a commodity item, but he also realized that a major sea change had to occur to make these batteries viable. No auto company yet has stepped up to the plate to produce these batteries at the scale as Tesla.

So, while Li batteries might not be unique to Tesla - the sheer scale and audacity of the Gigafactories does indeed give Tesla a competitive advantage. But let's be clear the gigafactories were only one aspect of Tesla's secret sauce.

It was basically Musk's testosterone.

 

[alloverx]

Lets see if Tesla need more money in the short term, that will be the test.

 

[Mobius484]

Lets see how tesla energy ramps over next few months, plus the roadster deposits, plus truck deposits, all timed for the initial upstroke in the the “s” curve. Can’t wait to see those 3’s flying out of the Gigafactory in high quality....

 

[sandpiper]

I don't normally dismiss what Lutz has to say. As I said, I have held him in fairly high-esteem in the past. It's just that this most recent secret sauce comment is so bizarre.

Yes, we know Tesla is spending a lot of money. If Lutz simply commented on that, fine.

But we know why Musk is spending. He's building something new from the ground up. New cars, new tech, new business model. He's acknowledged that lithium batteries were a commodity item, but he also realized that a major sea change had to occur to make these batteries viable. No auto company yet has stepped up to the plate to produce these batteries at the scale as Tesla.

So, while Li batteries might not be unique to Tesla - the sheer scale and audacity of the Gigafactories does indeed give Tesla a competitive advantage. But let's be clear the gigafactories were only one aspect of Tesla's secret sauce.

It was basically Musk's testosterone.

Agreed. Tesla doesn't in-fact have a secret sauce. But they did put on the apron a decade ago and start cooking. As a result they've got sauce. To this day everybody else is standing in the kitchen, looking at cookbooks and making shopping lists.

 

[sandpiper]

Lets see how tesla energy ramps over next few months, plus the roadster deposits, plus truck deposits, all timed for the initial upstroke in the the “s” curve. Can’t wait to see those 3’s flying out of the Gigafactory in high quality....

It's the shape of that S-curve that will make or break the company. Can they get the revenue up in time?

I'm also quite concerned about their service model. Much as I love my S, it's not been a low maintenance vehicle. I'm a sterotypical early adopter, and am willing to live with some warts. I'm not sure that the 3 buyers are going to feel the same. Poor service combined with high service requirements could kill the company.

 

[James Anders]

It's the shape of that S-curve that will make or break the company. Can they get the revenue up in time?

I'm also quite concerned about their service model. Much as I love my S, it's not been a low maintenance vehicle. I'm a sterotypical early adopter, and am willing to live with some warts. I'm not sure that the 3 buyers are going to feel the same. Poor service combined with high service requirements could kill the company.

Sure. I get that. And one could have a meaningful and relevant discussion on many areas of Tesla financials, service, growth, etc.

My main beef with Lutz was his inane comment on the lack of a "secret sauce".

 

[SabrToothSqrl]

Lutz is as outdated as riding a horse to work... would someone please put him out to pasture already?

 

[Darmie]

I wonder if he has truly spent some time in a Tesla model S or X. He would have a different approach to Tesla if he had one for a week or even just a weekend. I know as an old man it would be hard to wrap his head around. I really think he's just not spent any time in one.

 

[jelloslug]

Someone should ask him how VIA Motors is doing.

 

[Doug_G]

Apparently he's become a walking click-bait.

 

[Darmie]

Someone should ask him how VIA Motors is doing.

Oh wow. I see the connection now of his bashing Tesla, he's a Chairman with that company.

 

[James Anders]

Oh wow. I see the connection now of his bashing Tesla, he's a Chairman with that company.

And founder. The relationship between Via and GM speaks to Lutz's Tesla bashing motives. It's still surprising, however. He's generally had more class than this type of petty nonsense.

 

[Darmie]

I've watched both movies, ("Who Killed the Electric Car", "Revenge of the Electric Car") and enjoyed the rich history they portrayed. There was a lot of Lutz in each one. I was a teenager when the EV1 was in production. I'm really looking forward to the third movie and being part of it now with ownership in electric. Hope notes are being taken, and Lutz still kicking for it will be exciting where this all plays out 20 years from now.