Tesla quick rise to success has ruffled some feathers in the automotive world, according to USA Today. Mike Jackson, the CEO of AutoNation, had some choice words to say about Tesla’s meteoric rise.
AutoNation is the largest automotive dealership chain in the US, and Mr. Jakcson’s comments further sour an already testy relationship between traditional dealers and Tesla. In a forum by the National Automobile Dealers Association ahead of the New York Auto Show, Jackson stated that Tesla is:
“Either one of the great Ponzi schemes of all time or it’s gonna work out…Clearly General Motors is undervalued and Tesla is overvalued…You have to tip your hat that he’s created a brand that has a strong cult-like following.
Tesla has a lot of competition coming. Giving away vehicles at below what it cost you to make them is not very exciting. Selling vehicles at a profit would be very impressive.”
AutoNation CEO says Tesla is a 'Ponzi scheme' or it'll 'work out' as rivalry between dealers and Tesla heats up. https://t.co/MM7C3xEkww
— USA TODAY Money (@USATODAYmoney) April 11, 2017
These comments came one day after Tesla passed General Motors as the most valuable American automaker, topping $51 billion for a brief period after the market opened. Despite burning through money at an unprecedented rate in order to achieve its vision of the future, Tesla shares soared to new heights when leading research firm Piper Jaffray raised Tesla’s price target by 65% to $368.
According to analyst Alexander Potter:
“More so than any stock we’ve covered, Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate…as they scramble to catch up, we think Tesla’s competitors only make themselves appear more desperate.”
Snarky name calling certainly doesn’t help the dealer franchises. The rivalry between the franchises and Tesla, which sells its vehicles directly to consumers, is sure to continue as Tesla prepares to enter the mass market with the upcoming launch of the Model 3. Grab your popcorn, folks; it’s going to be an entertaining few years.