Bob Lutz: "Almost a mass mental illness": Tesla's 250% rise in share price makes no sense

Elon MuskREUTERS / Mike Blake

  • Bob Lutz couldn't explain why Tesla's stock price surged more than 250% in six months.
  • The former GM, Ford and Chrysler executive told a BBC Business Daily podcast this week that Goldman Sachs analysts are asking if he "has any ideas".
  • "No one can explain," Lutz said. "This is entirely caused by psychology or almost a mass mental illness."
  • Lutz also underestimated the growth prospects of electric vehicles, believing that they will account for only 15% of global car sales by 2030.
  • Visit Business Insider's homepage for more stories.

Bob Lutz doesn't know why Tesla In six months, the stock price has surged more than 250%.

The smartest people on Wall Street, who have been auto industry veterans in their careers at Ford, Chrysler and General Motors, didn't say the same. BBC Business Week Podcast This Week.

"I spoke to people at Goldman Sachs, who are usually the world's most prominent stock price experts, and now they are asking me if I have any knowledge of Tesla stock development."

"No one can explain it, which goes well beyond the basic return expected by any shareholder."

Elon Musk's electric car startup has a current market value of $ 145 billion, dwarfing the combined market value of Ford, Chrysler and General Motors at $ 103 billion. According to Lutz, Tesla shares are no longer tied to anything tangible.

"It's all due to psychology or almost a mass mental illness," he said. He warned that the rally would not last. "Ultimately, stock prices will respond to financial fundamentals, and this day will come."

Exaggerated growth opportunities

Lutz downplayed the market opportunity for electric vehicles in an interview. He said the shift from traditional cars to electric cars was "somewhat fictitious" because global demand for them was mainly driven by government subsidies.

Lutz added that electric cars are expensive, unprofitable to produce, and inconvenient to use due to long charging times. Therefore, he predicts that they will account for only 15% of the global automotive market by 2030.

Despite his bearish view on Tesla's industry, Lutz praised the automaker's products. "This car isn't wrong," he said. "It's one of the best driving, best-in-class, and best-looking cars in the world."

Fund manager, Short sellers, even politicians Sounded the alarm Tesla's stock price rose a third in two days and went public last week. "Beware of Tesla followers," former presidential candidate Ralph Nader Tweet.

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