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> SpaceX’s president, Gwynne Shotwell, estimates that reusing these landed Falcon 9 vehicles will lead to a 30 percent reduction in launch costs, according to S

by davej 10y ago

> SpaceX’s president, Gwynne Shotwell, estimates that reusing these landed Falcon 9 vehicles will lead to a 30 percent reduction in launch costs, according to Space News. Surely it will be more than a 30% reduction once they make the rocket refactoring process more efficient? I've heard Elon say that the savings would be an order of magnitude given how low the cost of fuel is relative to everything else on the rocket. I know Elon is famously optimistic and Gwynne is probably dampening expectations on purpose but 30% doesn't seem very impressive. Is Gwynne just playing down the cost savings or is she likely to be accurate, even in the medium term (3-5 years)?

agildehaus 10y ago
It doesn't make much business sense to pass along ALL the efficiency savings directly to your customers. 30% reduction in launch costs will be hugely welcomed and SpaceX will be able to do lots with the additional revenue.
- mulcahey 10y ago
  Plus their launch backlog is already pretty full since they are undercutting all the incumbent providers... no sense in decreasing their margins if the current prices are very competitive.
- davej 10y ago
  Perhaps I misunderstood what Gwynne was saying. I thought that "launch costs" would be the cost of launching a rocket for SpaceX, rather than the price that they set for customers. Perhaps your correct though, the quote is a bit ambiguous.
  - codesterling 10y ago
    "It's saving 90% in launch costs, but we're only passing 30% of the savings along to the customer" doesn't sound very good in a press release.
cbeach 10y ago
Imagine the cost of the drone ship, the landing system and the logistics of recovery - I suspect that's the reason it's only a 30% reduction.
- davej 10y ago
  Most of those are once-off costs though. They may be expensive but I doubt they're all that expensive relative to the cost of the rocket.
shasheene 10y ago
Remember in the current Falcon 9 design, they are only reusing the first stage -- reported to account for 70% of the cost of the rocket (which is of course different to the retail price of launch service), and attempting to recover and reuse the fairing, an aluminum honeycomb core + carbon fibre sheet enclosure the size of a city bus, which is thought to add a couple million dollars per rocket including capital costs (SpaceX is thought to have limited capacity to produce fairings at a high rate, which is why they're chasing reuse). They still need to rebuild the entire second stage each launch, and continue to pay the salaries of 4,000+ employees. If the end-to-end launch service is priced at $60 million, 70% is $42 million, with the other 30% ($18 million) that needs to be paid each launch. Assuming the cost of all re-use is 100% free (gas and go), a full passing on of the savings would mean the second launch (which has a free first stage) could be priced at $18m + ($42m/2) = $39 million. That's a 35% discount off $60 million. SpaceX haven't proven that reflying a returned booster is safe and reliable. It will take many relaunches to gain statistical knowledge of safety of the fleet they're building. If SpaceX can reliably relaunch the first stage 5-10 times with minimal refurbishment costs, the amortized costs drop dramatically. During the development of the Merlin 1, testing aimed for 10 full duration (3 minute) test fires. I can see SpaceX aiming for 5-10 flights per booster with the current iteration of Falcon 9 over the longer term. I encourage anybody interested to play around with this spreadsheet [1]. If the current design can be proven to have say 5 launches per Falcon 9 booster, that's a 65% saving to SpaceX. Falcon 9 is already the cheapest vehicle in its class (though some providers are cost competitive if doing dual launches on say, an Ariane V). The Russia's Proton rockets were reasonably cost competitive, but their reliability has proven to be very low in recent times. As Amdahl's Law notes, as the number of reliable relaunches per rocket with minimal refurbishment costs increases towards infinity, the total cost will asymptotically approach the currently non-reusable portion of the costs (so in the current design it's the second stage, launch operations, fuel, fairings etc) In a few decades, SpaceX wants to get airplane like re-use (fully re-usable with thousands of flights per vehicle lifetime), where each passenger pays a marginal cost of roughly the jet fuel cost and inspections and refurbishments don't happen every single flight but at set intervals. That's a probably several design generations away though (human Mars landing will certainly happen first) [1] https://docs.google.com/spreadsheets/d/144Y_OVmFFYTh_zTiV-FH_kYuVekeyQoV47jhrVVPoR0/edit?usp=sharing#gid=0 https://docs.google.com/spreadsheets/d/144Y_OVmFFYTh_zTiV-FH...
JabavuAdams 10y ago
> 30% doesn't seem very impressive If one launch provider can send you up for $40M instead of $60M for the others, would you ever go with the others? Suddenly SpaceX owns the launch business.
- ygra 10y ago
  Except when their launch manifest is so full that they struggle to fit every customer in there. And I guess for some customers getting your satellite operational a few months earlier is worth more than 20 million.
grey-area 10y ago
Costs per launch include fuel (trivial at < $0.5m), rocket (say $30-40m of which first stage is 3/4) and recurring costs like employee time, refurbishment, test fires, barge rental, range costs etc (significant maybe 5-10m?). Musk is prone to talking about the far future as if it were tomorrow and within our grasp today. If you count medium term as 3-5 years (I'd call that short term), there is no way they're getting an order of magnitude saving. They charge $60m, so it's unlikely ever to come down below 20m without 2nd stage reuse, and say around 5-10m even with full re-use in a few decades. Best case they could probably get it down to 10% of current costs (90% saving) if they manage full re-use and cut down on recurring costs a lot, but for now 30% is pretty impressive.

by davej 10y ago

agildehaus 10y ago

It doesn't make much business sense to pass along ALL the efficiency savings directly to your customers. 30% reduction in launch costs will be hugely welcomed and SpaceX will be able to do lots with the additional revenue.

mulcahey 10y ago
Plus their launch backlog is already pretty full since they are undercutting all the incumbent providers... no sense in decreasing their margins if the current prices are very competitive.
davej 10y ago
Perhaps I misunderstood what Gwynne was saying. I thought that "launch costs" would be the cost of launching a rocket for SpaceX, rather than the price that they set for customers. Perhaps your correct though, the quote is a bit ambiguous.
- codesterling 10y ago
  "It's saving 90% in launch costs, but we're only passing 30% of the savings along to the customer" doesn't sound very good in a press release.

cbeach 10y ago

Imagine the cost of the drone ship, the landing system and the logistics of recovery - I suspect that's the reason it's only a 30% reduction.

davej 10y ago
Most of those are once-off costs though. They may be expensive but I doubt they're all that expensive relative to the cost of the rocket.

shasheene 10y ago

Remember in the current Falcon 9 design, they are only reusing the first stage -- reported to account for 70% of the cost of the rocket (which is of course different to the retail price of launch service), and attempting to recover and reuse the fairing, an aluminum honeycomb core + carbon fibre sheet enclosure the size of a city bus, which is thought to add a couple million dollars per rocket including capital costs (SpaceX is thought to have limited capacity to produce fairings at a high rate, which is why they're chasing reuse). They still need to rebuild the entire second stage each launch, and continue to pay the salaries of 4,000+ employees. If the end-to-end launch service is priced at $60 million, 70% is $42 million, with the other 30% ($18 million) that needs to be paid each launch. Assuming the cost of all re-use is 100% free (gas and go), a full passing on of the savings would mean the second launch (which has a free first stage) could be priced at $18m + ($42m/2) = $39 million. That's a 35% discount off $60 million. SpaceX haven't proven that reflying a returned booster is safe and reliable. It will take many relaunches to gain statistical knowledge of safety of the fleet they're building. If SpaceX can reliably relaunch the first stage 5-10 times with minimal refurbishment costs, the amortized costs drop dramatically. During the development of the Merlin 1, testing aimed for 10 full duration (3 minute) test fires. I can see SpaceX aiming for 5-10 flights per booster with the current iteration of Falcon 9 over the longer term. I encourage anybody interested to play around with this spreadsheet [1]. If the current design can be proven to have say 5 launches per Falcon 9 booster, that's a 65% saving to SpaceX. Falcon 9 is already the cheapest vehicle in its class (though some providers are cost competitive if doing dual launches on say, an Ariane V). The Russia's Proton rockets were reasonably cost competitive, but their reliability has proven to be very low in recent times. As Amdahl's Law notes, as the number of reliable relaunches per rocket with minimal refurbishment costs increases towards infinity, the total cost will asymptotically approach the currently non-reusable portion of the costs (so in the current design it's the second stage, launch operations, fuel, fairings etc) In a few decades, SpaceX wants to get airplane like re-use (fully re-usable with thousands of flights per vehicle lifetime), where each passenger pays a marginal cost of roughly the jet fuel cost and inspections and refurbishments don't happen every single flight but at set intervals. That's a probably several design generations away though (human Mars landing will certainly happen first) [1] https://docs.google.com/spreadsheets/d/144Y_OVmFFYTh_zTiV-FH_kYuVekeyQoV47jhrVVPoR0/edit?usp=sharing#gid=0 https://docs.google.com/spreadsheets/d/144Y_OVmFFYTh_zTiV-FH...

JabavuAdams 10y ago

> 30% doesn't seem very impressive If one launch provider can send you up for $40M instead of $60M for the others, would you ever go with the others? Suddenly SpaceX owns the launch business.

ygra 10y ago
Except when their launch manifest is so full that they struggle to fit every customer in there. And I guess for some customers getting your satellite operational a few months earlier is worth more than 20 million.

grey-area 10y ago

Costs per launch include fuel (trivial at < $0.5m), rocket (say $30-40m of which first stage is 3/4) and recurring costs like employee time, refurbishment, test fires, barge rental, range costs etc (significant maybe 5-10m?). Musk is prone to talking about the far future as if it were tomorrow and within our grasp today. If you count medium term as 3-5 years (I'd call that short term), there is no way they're getting an order of magnitude saving. They charge $60m, so it's unlikely ever to come down below 20m without 2nd stage reuse, and say around 5-10m even with full re-use in a few decades. Best case they could probably get it down to 10% of current costs (90% saving) if they manage full re-use and cut down on recurring costs a lot, but for now 30% is pretty impressive.