3 ms·

Why is Elon/SpaceX charging so much less for rockets? Couldn't they make more profit, to reinvest in Mars plans, by charging something like 90% of competitors

• ouid 9y ago
  I'm speculating wildly, but it's not like demand is totally inelastic for launches. If you can make launches a lot cheaper, then it's not totally inconceivable that they might make it up in additional volume. Also, if Musk's goal is Mars, then the best thing for that is the healthiest possible space program, which requires the most economic launches.
• oli5679 9y ago
  You have an implicit assumption that the competitor was previously charging close to cost. They have an incentive to cut prices too after Space-X enters. The old monopoly price is different to the price where Space-X wins the contract.
• ejolto 9y ago
  Falcon 9 is a new rocket without a lot of statistics about mission success rate. They had a few failed launches in 2015 and 2016. This makes launching your payload on a Falcon 9 more risky and you have to pay a higher insurance premium, than if you were to launch on a Soyuz rocket (all large payloads are insured). If they can get more successful launches under their belt, it will lower their risk and make insurance premiums go down. Then they can up their prices.