‘Almost a mass psychosis’: Tesla’s 250% stock rally makes no sense, Bob Lutz says

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REUTERS/Mike Blake

  • Bob Lutz can’t explain why Tesla stock has rocketed more than 250%in 6 months.
  • The previous GM, Ford, and Chrysler executive said on the BBC Service Daily podcast this week that Goldman Sachs analysts are asking him if he has “any idea what the heck is going on.”
  • ” No one can discuss it,” Lutz stated. “It’s driven purely by psychology or nearly a mass psychosis.”
  • Lutz also downplayed the development potential customers of electrical cars, arguing they’ll just make up 15%of international automobile sales in 2030.
  • See Organisation Insider’s homepage for more stories

Bob Lutz has no concept why Tesla stock has rocketed more than 250%in six months.

Neither do Wall Street’s brightest minds, the auto-industry veteran– who rested on the boards of Ford, Chrysler, and General Motors during his career– said on the BBC Company Daily podcast this week

” I spoke to people at Goldman Sachs, who are generally the world’s greatest specialists on discussing stock costs, and they’re now asking me whether I have any concept what the heck is going on with Tesla stock,” he stated.

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” Nobody can discuss it, it’s up until now beyond any fundamental return that any investor could ever anticipate.”

Elon Musk’s electric-car startup presently boasts a market capitalization of $145 billion– overshadowing Ford, Chrysler, and GM’s combined market cap of $103 billion. Tesla stock is no longer connected to anything tangible, Lutz argued.

” It’s driven simply by psychology or almost a mass psychosis,” he stated, cautioning the rally won’t last. “Ultimately, the share cost reacts to financial fundamental truth, which day will come.”

An overemphasized development chance

Lutz downplayed the market chance for electrical vehicles in the interview. The shift from conventional to electrical cars is “somewhat of a fiction,” he stated, as worldwide demand for them is largely fueled by federal government subsidies.

Electric cars are expensive and unprofitable to produce, Lutz included, and bothersome to use due to their long charging times. As an outcome, he anticipates them to only represent 15%of the international automobile market by2030

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In spite of his bearish view on Tesla’s industry, Lutz praised the automaker’s items. “There’s nothing incorrect with the car,” he said. “It is among the best-driving, best-performing, best-looking premium sedans in the world.”

Fund managers, short-sellers, and even political leaders sounded the alarm on Tesla recently after its shares soared by a 3rd in 2 days. “Beware Tesla followers,” former governmental prospect Ralph Nader tweeted

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