When Bob Lutz speaks, automotive journalists listen. Well, at least they usually do. When a recent Automotive News roundtable discussion showed Lutz blasting General Motors’ Chevy Bolt (and electric vehicles like it), mainstream journalists failed to pick up on the story. Lutz was right on the money when he exposed the EV folly, which is costing automakers billions of dollars and driving up prices of conventional, gas-powered vehicles.

Bob Lutz certainly has credibility in the automotive world. As an ex-GM executive he was known as the father of the Chevy Volt, a taxpayer-subsidized vehicle that I have had plenty of criticism for. Now that such a noted figure as Lutz has changed direction and is questioning the logic of lithium-ion battery technology, the automotive community should be taking notice.

So, since Lutz’s criticisms carry much more weight than my own, we can proceed to some of the bombshells that were dropped by him during the interview which featured six automotive “superstars.” The roundtable discussion addressed Fiat Chrysler Automobiles CEO Sergio Marchionne’s assertion that “automakers waste billions on pointless R&D investment and destroy heaps of shareholder value.”

Here are the excerpts from a transcript of the discussion:

FORMER GM VICE CHAIRMAN BOB LUTZ: The automobile business consumes enormous amounts of capital, which is why our fixed cost is so high and why when there's a downturn and the volume collapses, we're all into the multibillion-dollar losses and hemorrhaging cash.

Regarding the Chevy Bolt, which is the latest GM electric car being hyped:

LUTZ: I no longer have access to General Motors figures, but I would be surprised and shocked if the 200-mile electric Bolt is going to make money. You look at the cost per kilowatt hour of batteries and the number of kilowatt hours they have got in there and then you look at the selling price. It's just not going to work.

OK, in case any of you automotive journalists are paying attention, that bears repeating. BOB LUTZ JUST SAID THE CHEVY BOLT IS NOT GOING TO WORK. And Lutz is just getting warmed up! There’s more:

LUTZ: For the last 30 or 40 years, investors and analysts have been saying the automobile business is a great consumer of capital and does not return economic value to the shareholders.

What's new here? This is the first time somebody in the business — rather than being defensive and saying, “Wait until next year” and “We just went through a rough patch,” etc., etc. — is agreeing with the premise that the automobile business is a destroyer of capital. It really is.

And regarding the mandates to force money-losing electric cars and alternative vehicles on the public:

LUTZ: Yeah. Just do one fuel cell vehicle and have about six companies each participate in the architecture so that at least they might attain a volume of maybe 100,000, so that everybody can have their 5,000 or 6,000, which they're going to need to comply with California.

I don't know if anybody noticed, but full-size sport-utilities used to be — just a few years ago used to be $42,000, all in, fully equipped. You can't touch a Chevy Tahoe for under about $65 [thousand] now. Yukons are in the $70 [thousands]. The Escalade comfortably hits $100 [thousand]. Three or four years ago they were about $60,000. What this is, is companies trying to recover what they're losing at the other end with what I call compliance vehicles, which are Chevy Volts, Bolts, plug-in Cadillacs and fuel cell vehicles.

So my new friend Bob now says that the money-losing electric cars like the Chevy Volt, Chevy Bolt and Cadillac ELR are adding up to $40,000 in cost to conventionally-powered SUVs so that GM can absorb the losses! What a poor way to run a company. It is baffling that there has not been more criticism for the EV folly which is seeing wealthy buyers of Chevy Volts and Cadillac ELRs getting a taxpayer supplied federal credit of $7,500 each while buyers of other GM vehicles are paying thousands of dollars more to make up for the losses incurred by GM in building the electric losers. So, is there any hope in ending this madness, Bob?

LUTZ: Ultimately capitalism is going to talk. As long as the price-earnings ratios of automobile companies are where they are … the automobile industry is going to have a tough time generating new capital. At some point, there is going to be pressure from shareholders, shareholder activists, hedge funds or whatever, for mergers.

Thanks, Bob. It is great to hear from you and I am glad to see you are now speaking very logically about the feasibility of cars like the Bolt and Volt. Unfortunately, mergers alone will not solve the politically-popular folly of electric cars. The Obama Administration was set on forcing electric cars like the Chevy Volt on the public, despite the lack of feasibility. Republican representatives do not seem to want to end the ridiculous EV subsidies, even though in most cases the cars make no economic sense, nor do they help the environment.

Let’s hope noted figures like Bob Lutz can bring to light the ill-effects of our government trying to pick winners and losers instead of allowing free markets to work. Electric cars may or may not be the long-term solution to reducing oil dependence. Current evidence points to two things, one is that electric cars are not the future answer and two is that our government should step back and let logical alternatives develop without their heavy-handed and costly intervention.

Mark Modica is an NLPC Associate Fellow.