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SpaceX is propping up Cybertruck sales · Elon Musk Podcast

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SpaceX and other companies owned by Elon Musk purchased nearly
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one fifth of all Tesla Cybertrucks registered in the
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United States over a recent reporting period.
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Yeah, out of just over 7000 total registrations in that
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window, 1279 went straight to SpaceX.
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Which is, I mean, that's just a wild percentage.
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It really is and it completely alters how you have to evaluate
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the market presence of this vehicle.
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Right, because normally you assume a vehicle on the road
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represents, you know, a regular consumer making a choice.
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Exactly. They weighed their options, they
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went to a dealership and they spent their own money.
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That establishes a baseline of organic demand.
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But when you introduce a single corporate buyer accounting for
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nearly 20% of all registered, that baseline just vanishes.
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So the. Question we really need to
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answer today is is this a legitimate strategy for fleet
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modernization, or is a private empire quietly buying up
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inventory to mask a total collapse in consumer demand for
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a public company? To really understand the
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mechanics of what is happening here, we have to look at how
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much regular consumer demand has actually dried up.
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If you subtract those internal purchases by Musk's own
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ecosystem, registrations would have plummeted by 51% compared
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to previous metrics. Wow, 51% and we are talking
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about an enormous amount of capital changing hands here,
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right? Absolutely.
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The total value of these internal purchases likely
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exceeds $100 million. That's incredible.
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There is even video footage from an aerospace tracking channel
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showing just rows and rows of these vehicles sitting idle at a
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launch facility in Texas. Yeah, the official social media
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accounts even joked about calling the facility a
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cyberbase, right? It is a highly visible
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accumulation of inventory for a product that originally promised
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like a massive backlog of eager buyers.
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Yeah, because previously they only moved around 20,000 units,
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which is roughly what 8% of the initial quarter million annual
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production target exactly back up.
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There is a detail in the registration data that really
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got my eye. Yeah.
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What's that? It wasn't just the rocket
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company doing this. XAI and Neuralink also bought a
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combined 60 trucks. Yeah, they did.
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Why does a brain interface company and a software focused
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artificial intelligence company needs 60 heavy duty stainless
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steel pickup trucks? Well the official line from
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engineering staff is that they are replacing their gas powered
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support fleets. OK.
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And I mean a rocket launch facility covers a massive amount
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of physical ground. They might genuinely need
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utility vehicles to move heavy equipment across unpaved areas.
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Sure. For rockets, maybe.
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But 50 tricks for an AI company that develops software and chat
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bots, that really stretches the definition of a necessary
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support vehicle. Yeah, because AI companies
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operate out of office parks and server farms.
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They write code, they manage cooling systems for data
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centers. They don't typically need heavy
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duty off road capability to haul servers around.
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No, not at all. Some reportedly use for
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security, but a standard sedan usually handles perimeter checks
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just fine. Exactly.
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And what this changes is the level of transparency available
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to you as an investor or just an observer of the automotive
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market. Because they're private
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companies. Right, because these purchasing
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companies are private entities, they do not have to disclose
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fleet acquisition the same way a public company would.
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So if you are a retail investor holding stock in this auto
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company, this is the exact kind of blind spot you need to be
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aware of. Absolutely.
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You might see a massive quarterly sales number and think
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your investment is doing great, completely unaware that the CEO
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just bought those cars from himself.
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Right, because when a public rental car agency buys, say,
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10,000 electric vehicles, there are press releases, SEC filings
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and just intense scrutiny of the terms.
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Yeah, the market can see exactly what the discount was and how it
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impacts profit margins. Exactly.
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But when a private aerospace firm buys over 1000 trucks from
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its CEO's public auto company, it happens quietly.
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Very quietly, you see a sales number on a quarterly report,
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but you don't immediately know that a massive chunk of that
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revenue came from a sister company.
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So since regular consumer demand is looking so shaky, there is a
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concerted effort to find alternative markets, right?
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Yeah, they need buyers who aren't just regular suburban
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commuters. And one of those markets is law
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enforcement. A specialized company called
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UPFIT is modifying these vehicles specifically for police
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use. Yeah, they're performing
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intensive aftermarket tactical upgrades.
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We were talking about adding level 3A Ballistics protection.
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Mechanically, that means installing armor capable of
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stopping standard handgun rounds, which adds significant
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weight to the doors and glass. Right, because it's already a
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heavy vehicle. Exactly.
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They're also integrating specialized radio equipment,
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adding satellite Internet capability, and building custom
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warning lights seamlessly into the frame to reduce aerodynamic
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drag. I saw that recently the Las
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Vegas Metropolitan Police Department acquired a fleet of
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11 of these modified trucks, 10 for regular patrol and 1
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specifically for SWAT operations.
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Yeah, they did. But here's a crucial detail
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about that Las Vegas acquisition.
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The Police Department didn't use taxpayer money for this.
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Really. Yeah, that $2.7 million fleet
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was entirely funded by a private donation from venture
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capitalists. Oh wow.
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It feels less like a natural municipal contract and more like
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a heavily sponsored promotional tour.
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Yeah, that makes sense. It's like a high school getting
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a brand new state-of-the-art scoreboard, but only because a
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local car dealership paid for it in exchange for putting their
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logo on top right right. The school didn't actually
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prioritize that in their budget, they just accepted a free gift.
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If a City Council isn't voting to approve the budget, it isn't
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a real market test. We saw a similar situation in
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Irvine, CA. That Police Department bought
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one for over $150,000, but it is primarily being used for a drug
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resistance community outreach program.
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So it's basically a public relations tool.
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Exactly, not a daily pursuit vehicle.
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However there is a functional reality to how the police are
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handling these vehicles. What do you mean?
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The Las Vegas department specifically requested the
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removal of the high acceleration software before putting them on
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the street. No, I can absolutely see why a
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heavy stainless steel vehicle accelerating to 60 mph in under
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3 seconds is a serious liability in a crowded urban environment.
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Yeah. It really is.
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You want predictable handling, not a drag racer.
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Right, They wanted to ensure officers maintain total control
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during routine patrols. Makes sense?
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But what that software limitation changes is the
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perception of the vehicles utility.
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By removing the speed element, it opens up a potential new
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tactical niche. OK, like what?
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Well, a durable steel body truck could be highly effective in
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specific policing scenarios like responding to barricaded
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suspects where armor and low end torque matter significantly more
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than a zero to 60 Sprint. Sure, but the reliance on
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private donations severely limits the narrative that
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municipalities are actively choosing to spend their own
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tight budgets on electric trucks over traditional options.
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That's very. True, some departments
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California testing standard electric sedans already reported
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issues with interior space for officers wearing bulky gear, not
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to mention maintenance bottlenecks when specialized
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charging infrastructure goes down.
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Until police departments are writing the checks themselves
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and choosing these trucks over a standard interceptor, it is hard
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to call it a true market expansion.
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Wait, so if police departments aren't actually using their own
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municipal budgets and everyday consumers aren't buying them in
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large numbers, who is actually injecting cash into this
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operation? Because cars aren't free to
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build. Exactly this points to a massive
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financial ecosystem connecting these public and private
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entities. The flow of capital between
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these organizations is fascinating, and it is growing
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incredibly complex. They're very complex.
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Recently, the Rocket company absorbed the AI company in an
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all stock merger. They created a combined private
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entity valued at over a trillion dollars, which is currently
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preparing for an enormous IPO. Right, and an all stock merger
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means no actual cash exchanges hands initially, they just swap
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shares, creating a higher valuation on paper.
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Meanwhile, the AI division has spent nearly $200 million
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purchasing massive industrial battery units from the auto
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company to power its data centers, and the CEO is also
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redirecting high end computer chips from the auto manufacturer
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over to the AI company to train neural networks.
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And on the other side of the equation, the public auto
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company is routing billions in investments back into that newly
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merged private entity. Exactly.
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Hold on, let's just look at the money.
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It is flowing in a circle. It is a closed loop of capital
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and what this changes is the fundamental risk profile for the
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public company. How so?
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It allows a massive cash rich private empire to act as an
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unlisted financial buffer for a struggling product line.
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So it's essentially like playing Monopoly but you're secretly
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controlling 2 different tokens. OK, yeah, if your race car is
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running low on cash, landing on bad properties and struggling to
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sell houses, your top hat token just quietly slides some cash
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under the board. That is exactly it.
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Nobody looking at the game notices the race car is actually
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failing to generate its own revenue.
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That is exactly the mechanism at play.
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It limits the natural consequences of a slow selling
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product. Usually, if a physical product
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isn't selling to consumers, the inventory piles up on dealer
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lots. The company has to slash prices
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to move the metal, and the stock takes a hit because revenue
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drops. Retail investors see the writing
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on the wall. But in this ecosystem, the
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private entity can just absorb the excess inventory.
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Exactly. They purchase the unsold trucks,
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which keeps the factory lines moving, prevents a visible
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inventory glut, and makes the quarterly sales numbers look
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completely respectable to Wall Street.
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Right. It is a highly unusual
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arrangement for a publicly traded automaker to rely this
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heavily on affiliated enterprises to maintain its
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delivery volumes. Definitely.
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And because the truck isn't selling to the masses, there is
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a quiet but deliberate narrative shift happening right now.
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Yeah, I've noticed that. Leadership is steering the long
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term conversation away from consumer pickup trucks entirely
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and heavily toward autonomous logistics and robotics.
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You can see why they want to change the subject.
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Honestly, the actual sales numbers fell incredibly short of
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their massive production targets.
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Now, leadership is claiming that 80% of the company's future
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value will come from their humanoid robot program, not the
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passenger vehicles. Right.
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They're even converting factory space that used to build
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flagship sedans into dedicated robotic manufacturing lines.
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Honestly, to me, this just looks like the truck is a commercial
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failure and they are trying to quickly move past it to the next
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shiny object. You think so?
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Yeah. They built something polarizing,
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people didn't buy it, so now they are pointing at the robot
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and saying look over here, we are a robotics company now I.
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Actually disagree with you there.
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Really. Yeah, I don't think they're
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abandoning the architecture. I think they're repurposing it.
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How do you mean? Well, look at the plans for the
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underground transit system in Las Vegas right now.
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It uses regular driven cars to move people through a couple
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miles of tunnels. But the company recently
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detailed plans to introduce a high capacity autonomous Transit
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van to supplement a fleet of over 1000 vehicles in those
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tunnels, specifically for moving large crowds during stadium
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events. But how does an underground
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passenger van connect to a stainless steel pickup truck?
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The connection is the underlying engineering, the autonomous
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processing power, the specific steering by wire mechanics, the
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high voltage electrical architecture.
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You know, that was all pioneered and refined on the truck.
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Steering by wire, for example, instead of physical steering
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column connecting your hands to the wheels, it's completely
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digital. You turn the wheel, the computer
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reads the input, and electric motors turn the tires.
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It's exactly the kind of architecture you need if you
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want to eventually remove the steering wheel entirely for an
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autonomous fan. That's true.
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They are also using a 48 Volt electrical system instead of the
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standard 12 Volt system found in most cars, right?
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That allows for much thinner wiring, significantly less
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weight, and easier assembly by robotic arms on the factory
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floor. Exactly.
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So the Trek is essentially A ruggedized test bed.
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They are using its physical platform as a stepping stone for
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unsupervised autonomous mass transport.
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So you were saying the physical shape of the truck matters
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significantly less than the computer brains and wiring
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harnesses inside it? Yes, and that completely changes
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how investors are meant to view the company.
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Oh. Absolutely.
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It shifts the metric of success. You are no longer evaluating
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them on how many pickup trucks they sell to suburban commuters.
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You are evaluating them on how quickly they can deploy self
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driving infrastructure and robotic systems.
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The technology inside the truck is being validated on the road,
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funded in part by those internal fleet purchases to build the
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foundation for the robotics division.
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But even with that pivot to autonomy and robotics, they
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still have a massive factory building pickup trucks today.
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And they recently introduced a major price reduction.
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Yeah, they did. They launched a new all-wheel
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drive version at $60,000 that completely strips away the
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premium pricing of the earlier models.
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Up until now, the high cost provided a convenient excuse for
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low sales. You could argue that people
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desperately wanted the truck but simply couldn't afford $100,000
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vehicle, especially in an economy where interest rates
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make car loans incredibly expensive.
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Hold on, I want to play devil's advocate here.
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Go for it. They just dropped the price to
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60 grand. Doesn't that completely ruin
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this internal bailout theory? How so?
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Because it's $60,000, regular people might actually start
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buying it and they won't need the rocket engineers to bail
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them out anymore, right? $60,000 is right in the middle
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of the standard pickup truck market.
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It competes directly with traditional gas trucks.
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Well, what this price reduction opens up is a definitive clean
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read on the market. OK, with the cost lowered to a
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much more accessible tier, the upcoming registration data will
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prove once and for all if everyday drivers actually want
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this vehicle in their driveway. Right, because if external sales
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to regular consumers stay flat at $60,000, the internal
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companies won't be able to buy in a volume to hide the lack of
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demand. Exactly.
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The math simply won't work anymore.
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You cannot sustain a mass market auto factory purely by selling
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vehicles to your own rocket engineers.
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This lower price point will basically expose the true
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organic demand without any financial smoke and mirrors.
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Exactly. The private ecosystem can buffer
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a slow rollout, but it cannot permanently replace millions of
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everyday consumers. So wrapping this up, a massive
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private tech empire is currently functioning as the primary
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customer for a struggling public auto manufacturer, blurring the
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lines of true consumer demand. And you have to wonder, with the
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historic IPO on the horizon for SpaceX, what happens to that
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financial ecosystem if public investors start questioning why
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rocket funding is being parked and unsold pickup trucks?
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