Former GM Exec Bob Lutz Says Tesla is 'Going Out of Business'

In an on-air interview Friday with CNBC’s Power Lunch, former General Motors executive Bob Lutz claimed American electric vehicle maker Tesla is “going out of business.”

Following Tesla’s unveiling of its electric semi and second-generation Roadster last week, Lutz went on CNBC and claimed the event was intended as a distraction from the manufacturing problems it’s experiencing with the Model 3. The automaker has been struggling to ramp-up production of the $35,000 sedan and failed to meet its third-quarter delivery targets, and Lutz thinks the semi event was a way to drum up hype and raise capital amid hard times.

“The company, folks, is going out of business,” Lutz said. At this rate they’ll never get to 2019.”

“They are hemorrhaging cash. They’re going to have to go for another capital raise,” he added.

SEE ALSO: Elon Musk Says the New Tesla Roadster Will be Even Faster

Lutz is an outspoken and harsh critic of Tesla, but his statements here are at least partly being driven by something other than unfounded disdain. Establishment brands like Volkswagen, Mercedes-Benz and General Motors are better versed in vehicle making and will have a myriad of Tesla-fighting products on hand soon, which could take a bite out of its sales. This is will be especially true if it can’t work out the kinks in its production line.

“There is no secret sauce in Tesla,” Lutz said, referencing other automaker’s battery electric technology. “They use the same lithium-ion batteries as everybody else.”

Luckily for Tesla, it has enough of a jump on the competition for there to be a large gap between the Model 3 and the arrival of the next worthy competing product. Let’s just hope Musk can deliver on his promise of building 5,000 Model 3s a week by the end of the first-quarter of 2018.