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While most analysts and industry experts are applauding Tesla Motors Inc (NASDAQ: TSLA) new found enthusiasm on batteries, some are also questioning why the company is focussing on that when it has a car business to run. Among them is Bob Lutz, former General Motors Company (NYSE: GM) vice chairman.
Lutz was on CNBC Monday to explain why he thinks that Tesla is overvalued.
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Overvalued
“I think it (Tesla) is greatly overvalued because having batteries as back-up storage, that’s been around for 100s of years and since weight doesn’t matter if the battery is stationary,” Lutz said. “Really the cheapest and most effective battery backup systems are made out of lead-acid since you don’t have to carry it.”
Unprofitable Infinitesimally Small Car Business
He continued, “So, I can’t understand the fascination with this and then there is the fact that he has got a car business which is by global standards still infinitesimally small and he has yet to turn a profit on the car business and I think the prospects for making money on the cars is pretty slim and the company is also haemorrhaging cash.”
Now Is The Top
“So, I think what we are seeing is here is that Elon who I really like and admire greatly, but every time the question is – well, what about the car business? He says, ‘No, no never mind the car business. I have an even better idea.’ And then he rolls out the battery thing. So, I am not recommending Sell because I am not an analyst. I am just saying that if I were a holder, I would think now is about the top that the stock is going to attain,” Lutz concluded.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.