Bob Lutz praises Tesla production volume 'breakthrough'

The outspoken executive apparently no longer thinks the company is heading for failure.

Former GM executive Bob Lutz has apparently changed his mind about Tesla after predicting that the company would end up in the 'graveyard.'

Speaking to CNBC, the auto industry veteran praised Tesla chief Elon Musk for finally cutting costs by reducing personnel and addressing unnecessary expenditures.

Backpedaling from his previous prediction that Tesla "will never make money on the Model 3," Lutz now says the company has achieved a "volume breakthrough" and has maintained strong sales despite early struggles with production ramp-up.

"As long as they can keep that premium pricing, which is as I say about $33,000 over where they had originally talked about, obviously that car is going to be profitable," he added.

Lutz also highlighted a shift in Musk's business acumen with "less talk, less bluster" and a tighter focus on products and cost control.

A separate report posted by CNN points to a short-seller 'bloodbath' as investors lost $8.4 billion betting against Elon Musk in the past seven months, according to analysts at S3 Partners. Tesla's market cap has more than doubled in the past six months, reaching a valuation that is roughly equal to General Motors and Ford combined.

Read more!