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."

Comments

Re:That's what Nokia, Moto, and Microsoft said

[gweilo8888]

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.

Re:That's what Nokia, Moto, and Microsoft said

[TomGreenhaw]

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.