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Former GM and BMW Executive Warns Apple: Your Car Will Be a "Gigantic Money Pit"
An anonymous reader writes: With rumors that Apple is not only moving ahead on its electric car initiative, but trying to accelerate its development, a former GM and BMW exec is giving a few words of warning. Bob Lutz appeared on CNBC and expressed his doubts that Apple has a fighting chance to make any impact on the auto industry. "And when it comes to actually making cars," Lutz said, "there is no reason to assume that Apple, with no experience, will suddenly do a better job than General Motors, Ford, Volkswagen, Toyota or Hyundai. So I think this is going to be a gigantic money pit, but then it doesn't matter. I mean Apple has an embarrassment of riches, they don't know where to put the cash anymore. So if they burn 30 or 40 billion dollars in the car business, no one's going to notice."
Tesla's impact on the market, thus far, is squat. Volkswagen brands alone sold 10.14 million vehicles in 2014. Even if you ignore Tesla's fiddling of the numbers (with nonsensical claims about sales being low because customers "were on vacation"), they sold a grand total of 35,000 cars in 2014. VW's marques managed that many in 30 hours, 15 minutes.
I know it's the done thing around these parts to fellate Mr. Musk at every opportunity, but the fact is that in the automotive world, he's a flea. He's completely insignificant and his toys for rich kids -- subsidized by yours and my taxpayer dollars, natch -- have not changed the market even one iota. Of the nearly 90-million cars and commercial vehicles sold in 2014, Elon captured a spectacular 0.04 percent of the market at best.
Apple buys VW/Audi and rebrands (since the brands will be taking a big hit very soon), and consumers forget about dieselgate. Apple gets the infrastructure to build cars, as well as an eager dealership network. They throw money at some new designers to oversee the existing engineers and make the vehicles they want to make.
Book it, done deal.
Hyundai got started for a lot less than that. For the projected losses, Apple could buy GM, take the best 1% from GM, then shut down GM, writing off the whole thing, and still end up ahead. The sentiment is wrong, the math is wrong, and the reality is wrong. He's just proven that even idiots can make millions as a CEO.
And yes, I know many don't like Hyundai, but from their bad start with the Elantra in the US, they've improved to be better than GM at this point (from a satisfaction and quality standard).
Learn to love Alaska
For what ts worth, speculative investors don't agree that Tesla is insignificant. Tesla's Market Cap is in the neighborhood of $33.8 billion whereas GM is $47.5 billion.
Greed is the root of all evil.
They should just buy Tesla. Instant start, applefy the fuck out of it. One of the big three would probably go under in 5 years.
They bought Dr Dre's shitty headphones?
Mod me down, my New Earth Global Warmingist friends!