Mike Jackson, longtime leader of AutoNation, accused Elon Musk of running a "bait-and-switch" on his promise of a $35,000 Model 3 sedan, saying Tesla may not be around to see electric cars become a real force in the industry.

"We're past the inflection point on electrification," Jackson told CNBC on Wednesday, predicting 30 percent of vehicles will be electric in about 10 years. "I think if Tesla was there it would be quite something."

That's because, according to Jackson, Musk does not have a sustainable business strategy for the long haul.

"I think when you're skimming the Model 3 with a bait-and-switch strategy maybe it works" for a while, the outgoing AutoNation CEO said on "Squawk Box." "But there's going to be a day of reckoning."

Jackson said Musk has only been able to build the Model 3, designed for the mass market, to sell around $50,000. "If you want one at the $35,000 he may never build it for you." The Model 3 has been experiencing well-publicized production problems.

Tesla's Model S sedan and Model X SUV start at $77,000 and $83,000, respectively.

With more and more established automakers getting into electric at the high end and the lower end, the race to corner the burgeoning market does not favor Tesla, said Jackson, who also announced he's stepping aside as CEO next year.

"What the mainline manufacturers are doing is taking the profits from trucks and subsidizing electric vehicles to get through the difficulties," Jackson said. "Tesla is being subsidized by the shareholders."

Musk has been on shaky ground with investors ever since his Aug. 7 tweet about considering taking Tesla private with "funding secured" at $420 per share. The stock closed the day before at nearly $342.

While the take-private idea was scrapped, Tesla said Tuesday that the Justice Department requested documents regarding Musk's comments.

Shares of Tesla fell as much as 7 percent right after the news, before closing down nearly 3.4 percent to almost $285. Since the Aug. 7 close, the stock has lost about 25 percent of its value.

During that time, Musk's behavior has been rather erratic, with the Tesla CEO even smoking pot during a podcast interview earlier this month.

Jackson said he basically agrees with the premise from former GM Vice Chairman Bob Lutz, who said Tuesday on CNBC that Tesla is "headed for the graveyard" because it can't make money on the Model 3.

Lutz, a frequent critic of Musk, said recently that the CEO should step aside at Tesla, which did not immediately respond to CNBC's request for comment on Lutz's or Jackson's remarks.

Jackson on Wednesday reiterated that AutoNation and he have no beef with Tesla or Musk, pointing out it never challenged Tesla's distribution model that avoids dealers in favor of selling at Tesla-only stores.

In the past, Jackson said he would be open to selling Teslas at AutoNation locations if Musk were to change his mind about not using dealers.