Could Tesla Go Out of Business? Auto Veteran Bob Lutz Thinks So

According to auto industry veteran Bob Lutz (who is now 85), Tesla might not be around in the future and now is the time to buy a Tesla.

[Elon Musk] hasn't figured out the revenues have to be greater than costs … when you are perennially running out of cash you are just not running a good automobile company. I don’t see anything on the horizon that’s going to fix that, so those of you who are interested in collector cars, may I suggest buying a Tesla Model S while they're still available.

Lutz who is 85 and has worked for some big automotive companies is thinking from a traditional business perspective, not a tech perspective. Make no mistake, Tesla is a technology company first and automotive maker second. Before Elon and Tesla, advancements in the electric vehicle industry were stagnant.

Musk is building battery production facilities and licencing Tesla technology to other automotive makers who want to produce electric vehicles.

In the world of technology, companies can run for years not turning a profit. The economics for running a company in this day and age have been flipped, it isn't uncommon for companies like Tesla, Uber, Airbnb and others to go through multiple rounds of funding.

If Tesla did go out of business, given how reliant the Tesla vehicles are on Tesla's infrastructure it would make them expensive bricks (unless the company issued a patch untethering the vehicle).

In 2017, Uber lost $2.8 billion. Spotify which is the worlds largest music streaming platform lost $581 million and probably the most surprising: Netflix lost $2 billion with a reported figure of $20 billion in debts and liabilities (although Netflix disputes this figure).

Look at Twitter, it has been around for years and it is only just now starting to get close to turning a profit: they announced they were going public in 2013.

As long as a tech company has a growing userbase, venture capitalists will always be willing to take a slice of the pie in exchange for troves of cash to pad the pockets of a company. It's the promise of potential profit that VC's invest into.

Tesla is on track to sell more electric vehicles to date than any other automotive company and more importantly Tesla is valued at $70 billion which is more than Ford, GM or Honda.

If venture capitalists are willing to sustain Twitter, Uber and other products with less of a world impact, I am doubtful that we'll be seeing Tesla going anywhere for the foreseeable future.