Considering Tesla’s stand on direct car sales and AutoNation being the largest automotive retailer in the US, it’s not exactly surprising that the CEO of the latter would not be enthusiastic about the former –  and that’s to say the least.

During a talk today, AutoNation CEO Mike Jackson went as far as comparing Tesla’s valuation to a “Ponzi Scheme” and perpetuated a falsehood that other automaker and dealership representatives have made in the past – that Tesla “sells vehicles below cost”.

At the NADA/J.D. Power Automotive Forum ahead of the New York Auto Show today, when talking about Tesla’s valuation surpassing GM’s, Jackson said (via USAToday):

“Tesla is either one of the great Ponzi schemes of all time or it’s gonna work out,”

He is referring to the fact that Tesla keeps going back to the market to raise more money, not unlike a Ponzi scheme. Though in a Ponzi scheme, there’s no actual product or investment, the sole purpose of the scheme is to attract more investors to pay off previous investors, which is obviously not the case with Tesla.

Tesla had $7 billion in revenue last year and delivered 25,000 vehicles last quarter. We can argue on its valuation, but it’s definitely a real business.

But then Jackson went a step further and lied about Tesla’s gross margins on stage:

“Selling vehicles at a profit would be very impressive. Giving away vehicles at below what it cost you to make them is not very exciting.”

That’s a talking point that the auto industry has been pushing about EVs for years –  “there’s no way to make a profit on electric vehicles and automakers only make them for compliance credits”.

They often use Tesla as an example and claims that the company is selling its vehicles below cost to explains its losses, which is of course verifiably untrue. Tesla has a positive gross margin on its vehicles for years now and as much as 20% for the past few quarters. That’s without accounting for ZEV credits.

Tesla undoubtedly loses money overall, but that’s mainly because the company is heavily investing in its growth with the Gigafactory, Fremont factory, stores, service centers and Superchargers.

Jackson ignores that and instead compares Tesla to GM, which has years of investment in its capacity behind the company:

“For a decade, Tesla has given us the car of the future: a sexy, high-performance, networked, and lately semi-self-driving luxury electric car. Last year, Chevy brought us the new car of the future: relatively inexpensive, with decent performance, also networked, and most importantly, plugged into multiple business models. Oh, and it’s manufactured at massive industrial scale in the USA.”

Of course, the important point here is “plugged into multiple business models”, which translates to “AutoNation’s business model” of car dealerships.

It will be interesting going forward to see how Tesla’s business model clashes with large automotive retailers like AutoNation, especially when you consider the fact that Tesla managed to retain a large portion of its used car business.

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