That doubt permeates the industry in southeast Michigan. Just look at quotes from “Big Three” executives like Bob Lutz, who wrote a column casting doubts on the Palo Alto-based electric car company, even calling it “doomed.” And then there’s Sergio Marchionne, delusional head of Fiat Chrysler Automobiles, who claimed he could build a Tesla Model 3 competitor and get it on the market within 12 months if he felt like it. This makes a lot of sense, much like I can hit a home run at Comerica Park; I don’t want to embarrass the professionals on the Detroit Tigers.
Marchionne, like Lutz, can’t see how Tesla can do what his company cannot. “If we can’t do it, with our hundreds of thousands of employees and unfathomably complicated bureaucracy, neither can they,” is the mentality of these well-established automotive giants. But whether the Model 3 is profitable or not, for Marchionne to claim that he can design and manufacture a car that competes with it in only a matter of months is not just an insult to Tesla; it’s pretty much an insult to his investors.
It’s just another old-timer exec from Detroit’s “Big Three” who thinks, “If the new guys can do it, so can we.” Never mind that there’s never an explanation for why they haven’t already. But we could forgive a CEO for outlandish and dumb statements. That’s pretty much a CEO’s job. But that kind of thinking isn’t limited to those at the top; it permeates through Big Three culture. In a recent financial call first picked up by StreetInsider, the former chief engineer of the Chevrolet Volt broke down his predictions of the Tesla Model 3’s production costs, only to be called out by Tesla’s head of investor relations.
A Swiss financial services company analyst hosted a call with the former chief engineer of the Chevrolet Volt, Jon Berea. Berea, now the CEO of an EV-focused engineering consulting firm, broke down his estimate of Tesla Model 3 costs, ultimately concluding that the car is unprofitable and that—surprise, surprise—the Chevrolet Bolt is likely a better financial move.
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The news site describes Bereisa’s cost breakdown, which states that the Model 3’s factory variable costs are over $1,500 higher than the $35,000 base price and that the Bolts are nearly five grand lower than its base price. Here’s their quote: I don’t know if the Model 3 will be profitable. It might not be. But regardless, this is another instance of a biased GM veteran in disbelief that Tesla can do something he and his company could not, even though they’ve done that already, many times.
