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> Added background: I'm not so optimistic regarding bith Tesla and SpceX anymore as have been, especially Tesla. Not commenting on Tesla, but why are you not o

> Added background: I'm not so optimistic regarding bith Tesla and SpceX anymore as have been, especially Tesla. Not commenting on Tesla, but why are you not optimistic wrt SpaceX? To put simply, SpaceX has won the space launch industry more thoroughly than anyone could have predicted just a few years ago. SpaceX is now routinely recovering every core they fly, and based on publicly revealed data they are cheap to refurbish. This means launch costs they pay are down to a small fraction of what everyone else pays. They have reduced the cost of getting to the end of their launch queue to $60M for basic service, and despite the low sticker price they are still probably making more profit per launch (not profit margin, more flat profit) on those than any of their competitors are. According to Königsmann's recent talk at IAC, they now have a 100 future launches on their launch manifest, priced at about $12B. That's more than the entire rest of the commercial launch industry put together, by a huge margin. Because they now get their first stages back, it means that their stable of launchers grows larger and their launch cadence can improve with every new finished rocket, so they can rapidly turn those deals into actual profit. In just a few years, SpaceX has turned from the scrappy upstart to the 800-pound gorilla who dwarf all their competition. On top of that they have the BFR which sounds fantastic and fantastical, and their satellite internet business which seems designed to make sure they don't run out of launches for their launchers, and both those projects are a lot more risky. But the point is, unlike Tesla with Model 3, those projects can fail and they will still be the most effective and profitable space launch company in human history. They can afford to have a long and explosion-filled development cycle for the BFR. In a lot of ways, they have already won, and that's just the victory lap. Of course, until they get BFR worked out, they are not going to go to Mars.

hef19898 8y ago
It is curious that whenever I voice doubts regarding SPaceX I get quite some downvotes. But I digress. The main reasons I am not that optimistic anymore regarding SpaceX are financial, mostly based on some doubts I developed regardintheir real launch prices ( I know that there is no "standard" launch) and the fact that encumbents are waking up. So, as far as financials are concerned 100 launches representing $12B mean an average of $120M per launch, a far cry from the $62M they are advertising. These price are not that far of from, say, Ariane. Sure, it's an average, which is exactly my point. Underbidding other commercial providers is easoer when you get highly priced government work to susidize these commercial launches (ULA is a nice case in point regarding the revenue and profits government work is providing. this also explains a lot about ULA, but that is a different topic). SO the first issue I have is the hype regarding SpaceX costs which is purely based on advertised numbers. The discrepancy was also there up to 2015 (wsj published internal docs and real number up to 2015 in Junuary 2017). So, to me it seems that SpaceX is doing what everybody else is doing in that sector: taking government contracts to cross finance commercial business. Be it development contracts (SpaceX and Boeing for manned space flights), purely military programms (F-35, Eurofighter,...) or direct state subsidies (Airbus, Boeing tends to get the government money through military programms). I'm not judging here, it is simply a common industry practrice. I totaly agree that SpaceX has a much lower development cost structure as purely private company without any political and bureaucratic beef, I just doubt that this advantage is as great as I believed it to be. The other threat I see is now that incumbents woke up competition for comparative launchers is getting tougher. While Ariane-5, as one example, was intended for a shuttle-like program Ariane-6 will be much closer to a Falcon-9 and will allow lower costs per kg-payload. Last estimates put in almost in a ballpark region of Falcon-9s based in advertised prices not taken the above emntioned averages into account. As a result it is reasonable to assume that SpaceX cost advantage will not stay for ever. The other oart, somehow related, is reliability. Both, ULA and Ariane, have a better launch record than SpaceX. That reused Falcon-9s are now advertized as "launch-proven" instead of reused (nice counter-point to a expendable launcher when you look at a unit level) kind of confirms this and is again pure marketing. Not sure how much marketing factors in when someone wants to launch a $100M plus payload so. And the final factor is that incumbents have really deep pockets, SpaceX needs venture capital. All of this doesn't mean that SpaceX did not achieve incredible things, they showed how fast and cheap development can be without political BS. They developed a reusable rocket (finacial aspects non-withstanding). They breathed life again into the American space programs. So when I say less optimistic that implies a very high (hyped?) starting point. EDIT: Ariane-6 is scheduled to replace the Ariane-5, with an unclear development up ahead it it seems obvious that demand is shifting to a provider with an already developed launcher. As you see I did not look to deep into ULA yet, so everything is coming down to Arianespace - SpaceX comparison.
- Tuna-Fish 8y ago
  > a far cry from the $62M they are advertising. $62M gets you a spot at the end of their launch manifest, for the standard service as laid out in https://www.spacex.com/sites/spacex/files/falcon_9_users_guide_rev_2.0.pdf https://www.spacex.com/sites/spacex/files/falcon_9_users_gui... The customers who want some additional service over what is detailed in the manual have to pay more. The customers with launch dates soon will have entered the queue before the prices were lowered, and have to pay the prices they agreed on. If they choose to, they are free to give up their position, and re-enter at the back of the queue for the cheaper price. Several operators have indeed done this, at least one more than once. > Sure, it's an average, which is exactly my point. Underbidding other commercial providers is easoer when you get highly priced government work to susidize these commercial launches The government prices are higher because at the time the contracts were written, they agreed to a price that was half of what was available on any other commercial provider, including Arianespace. At the time, oldspace basically laughed at them and said that it cannot be done at that price. Since then, SpaceX has driven down the prices across the board. Would you call this a subsidy? Also, the government price also pays not just for the launch, but also for the development and manufacture of the Dragon capsule, which is something Arianespace does not have the equivalent of, and which probably costs more than the launcher. But the most important part of all this subsidy talk is that the statement "government launches subsidize private ones" is just plain false, because the private ones also make profit, and a lot of it. The government launches still make more profit, and you could argue that the government deals subsidized the development. But to say they subsidize the launches would imply that SpaceX doesn't make profit on their cheapest launches, which they do. Overall, the cost argument is FUD. While nothing you said was technically false, it was instead carefully crafted half-truths designed to obscure the reality, which is that if you do pay SpaceX $62M, they will fire your payload into orbit, make a profit doing so, and no-one else is at this time able to compete with them on this. > Ariane-6 will be much closer to a Falcon-9 and will allow lower costs per kg-payload. Ariane-6 design was selected in late 2014, to be competitive against the pricing of F9 in 2015. The design then selected is no longer competitive against modern SpaceX pricing, which has caused most of the prospective commercial clients to book flights with SpaceX instead. (Hence the 100-launch order book.) The development of the rocket still continues with ESA funds, because of it's strategic significance, despite the fact that the rocket will never be able to be commercially successful. To be able to compete against SpaceX, they are developing Ariane NEXT, which is a project set to reduce the cost of Ariane-6 by a factor of 2. This would make it competitive against SpaceX pricing as of today. There are two problems with this. The first is that the current SpaceX pricing is not their floor -- their prices are set to make them healthy profits, and if there is actual competition they can drop them more. The second is that the timeline for Ariane NEXT has the rocket completed in the 2025-2030 timeframe. So SpaceX could ride their current launch system for a decade before competition. SpaceX launched it's very first rocket a decade ago. Do you believe that they will not have either improved F9 to make it more cost-competitive given a decade of milking it, or phased it out for BFR? The other supposed F9 competitors are hardly better off. The Russian Angara is expendable, yet to launch a real payload and already uncompetitive on cost and losing contracts. They have talked about a replacement, but that is still a pure paper rocket, as no funds have been allocated. ULA is developing the Vulcan which expects to first launch in "mid-2020s", and which is expendable. For missions that go far enough, they can actually beat the current F9 lineup, mainly because of their awesome upper stage. However, at the bread and butter of commercial launches, LEO and GEO, they will have a very hard time competing on cost. If the Gateway program is not cancelled, they can probably get a profit on that. Regardless, they are also still a decade away, and will have to face what SpaceX makes then, not what they fly today. Blue Origin might surprise us all and suddenly launch a very nice, reusable booster. That is, if they ever actually choose to enter the market and launch something. As of today, they are still MIA. > The other oart, somehow related, is reliability. Both, ULA and Ariane, have a better launch record than SpaceX. That reused Falcon-9s are now advertized as "launch-proven" instead of reused (nice counter-point to a expendable launcher when you look at a unit level) kind of confirms this and is again pure marketing. Not sure how much marketing factors in when someone wants to launch a $100M plus payload so. It probably doesn't factor in much at all. But what does is insurance. All commercial launches are insured, and the insurance premiums for SpaceX are not substantially higher than other operators. This tells me that either the insurers are idiots, or that they feel that F9 today is nearly as safe as the competitors. Either way, the customers don't care, as it's not them who lose money if a rocket blows up. Hence, the 100-launch order book. Which is more than the other commercial operators put together. > And the final factor is that incumbents have really deep pockets, SpaceX needs venture capital. SpaceX could now run without any additional capital investment. They have a working assembly line, working launch infrastructure, and are cranking out rockets which each make a profit on launch, then land and launch again, and again... And this is why venture capital is so cheap for them. (see https://www.cnbc.com/2018/04/13/equidate-spacex-27-billion-valuation-shows-unlimited-private-funding-available.html https://www.cnbc.com/2018/04/13/equidate-spacex-27-billion-v... ) And they will take in a lot of it to develop BFR. And they will have more of it available than any of those deep pocketed competitors.

hef19898 8y ago

It is curious that whenever I voice doubts regarding SPaceX I get quite some downvotes. But I digress. The main reasons I am not that optimistic anymore regarding SpaceX are financial, mostly based on some doubts I developed regardintheir real launch prices ( I know that there is no "standard" launch) and the fact that encumbents are waking up. So, as far as financials are concerned 100 launches representing $12B mean an average of $120M per launch, a far cry from the $62M they are advertising. These price are not that far of from, say, Ariane. Sure, it's an average, which is exactly my point. Underbidding other commercial providers is easoer when you get highly priced government work to susidize these commercial launches (ULA is a nice case in point regarding the revenue and profits government work is providing. this also explains a lot about ULA, but that is a different topic). SO the first issue I have is the hype regarding SpaceX costs which is purely based on advertised numbers. The discrepancy was also there up to 2015 (wsj published internal docs and real number up to 2015 in Junuary 2017). So, to me it seems that SpaceX is doing what everybody else is doing in that sector: taking government contracts to cross finance commercial business. Be it development contracts (SpaceX and Boeing for manned space flights), purely military programms (F-35, Eurofighter,...) or direct state subsidies (Airbus, Boeing tends to get the government money through military programms). I'm not judging here, it is simply a common industry practrice. I totaly agree that SpaceX has a much lower development cost structure as purely private company without any political and bureaucratic beef, I just doubt that this advantage is as great as I believed it to be. The other threat I see is now that incumbents woke up competition for comparative launchers is getting tougher. While Ariane-5, as one example, was intended for a shuttle-like program Ariane-6 will be much closer to a Falcon-9 and will allow lower costs per kg-payload. Last estimates put in almost in a ballpark region of Falcon-9s based in advertised prices not taken the above emntioned averages into account. As a result it is reasonable to assume that SpaceX cost advantage will not stay for ever. The other oart, somehow related, is reliability. Both, ULA and Ariane, have a better launch record than SpaceX. That reused Falcon-9s are now advertized as "launch-proven" instead of reused (nice counter-point to a expendable launcher when you look at a unit level) kind of confirms this and is again pure marketing. Not sure how much marketing factors in when someone wants to launch a $100M plus payload so. And the final factor is that incumbents have really deep pockets, SpaceX needs venture capital. All of this doesn't mean that SpaceX did not achieve incredible things, they showed how fast and cheap development can be without political BS. They developed a reusable rocket (finacial aspects non-withstanding). They breathed life again into the American space programs. So when I say less optimistic that implies a very high (hyped?) starting point. EDIT: Ariane-6 is scheduled to replace the Ariane-5, with an unclear development up ahead it it seems obvious that demand is shifting to a provider with an already developed launcher. As you see I did not look to deep into ULA yet, so everything is coming down to Arianespace - SpaceX comparison.

Tuna-Fish 8y ago
> a far cry from the $62M they are advertising. $62M gets you a spot at the end of their launch manifest, for the standard service as laid out in https://www.spacex.com/sites/spacex/files/falcon_9_users_guide_rev_2.0.pdf https://www.spacex.com/sites/spacex/files/falcon_9_users_gui... The customers who want some additional service over what is detailed in the manual have to pay more. The customers with launch dates soon will have entered the queue before the prices were lowered, and have to pay the prices they agreed on. If they choose to, they are free to give up their position, and re-enter at the back of the queue for the cheaper price. Several operators have indeed done this, at least one more than once. > Sure, it's an average, which is exactly my point. Underbidding other commercial providers is easoer when you get highly priced government work to susidize these commercial launches The government prices are higher because at the time the contracts were written, they agreed to a price that was half of what was available on any other commercial provider, including Arianespace. At the time, oldspace basically laughed at them and said that it cannot be done at that price. Since then, SpaceX has driven down the prices across the board. Would you call this a subsidy? Also, the government price also pays not just for the launch, but also for the development and manufacture of the Dragon capsule, which is something Arianespace does not have the equivalent of, and which probably costs more than the launcher. But the most important part of all this subsidy talk is that the statement "government launches subsidize private ones" is just plain false, because the private ones also make profit, and a lot of it. The government launches still make more profit, and you could argue that the government deals subsidized the development. But to say they subsidize the launches would imply that SpaceX doesn't make profit on their cheapest launches, which they do. Overall, the cost argument is FUD. While nothing you said was technically false, it was instead carefully crafted half-truths designed to obscure the reality, which is that if you do pay SpaceX $62M, they will fire your payload into orbit, make a profit doing so, and no-one else is at this time able to compete with them on this. > Ariane-6 will be much closer to a Falcon-9 and will allow lower costs per kg-payload. Ariane-6 design was selected in late 2014, to be competitive against the pricing of F9 in 2015. The design then selected is no longer competitive against modern SpaceX pricing, which has caused most of the prospective commercial clients to book flights with SpaceX instead. (Hence the 100-launch order book.) The development of the rocket still continues with ESA funds, because of it's strategic significance, despite the fact that the rocket will never be able to be commercially successful. To be able to compete against SpaceX, they are developing Ariane NEXT, which is a project set to reduce the cost of Ariane-6 by a factor of 2. This would make it competitive against SpaceX pricing as of today. There are two problems with this. The first is that the current SpaceX pricing is not their floor -- their prices are set to make them healthy profits, and if there is actual competition they can drop them more. The second is that the timeline for Ariane NEXT has the rocket completed in the 2025-2030 timeframe. So SpaceX could ride their current launch system for a decade before competition. SpaceX launched it's very first rocket a decade ago. Do you believe that they will not have either improved F9 to make it more cost-competitive given a decade of milking it, or phased it out for BFR? The other supposed F9 competitors are hardly better off. The Russian Angara is expendable, yet to launch a real payload and already uncompetitive on cost and losing contracts. They have talked about a replacement, but that is still a pure paper rocket, as no funds have been allocated. ULA is developing the Vulcan which expects to first launch in "mid-2020s", and which is expendable. For missions that go far enough, they can actually beat the current F9 lineup, mainly because of their awesome upper stage. However, at the bread and butter of commercial launches, LEO and GEO, they will have a very hard time competing on cost. If the Gateway program is not cancelled, they can probably get a profit on that. Regardless, they are also still a decade away, and will have to face what SpaceX makes then, not what they fly today. Blue Origin might surprise us all and suddenly launch a very nice, reusable booster. That is, if they ever actually choose to enter the market and launch something. As of today, they are still MIA. > The other oart, somehow related, is reliability. Both, ULA and Ariane, have a better launch record than SpaceX. That reused Falcon-9s are now advertized as "launch-proven" instead of reused (nice counter-point to a expendable launcher when you look at a unit level) kind of confirms this and is again pure marketing. Not sure how much marketing factors in when someone wants to launch a $100M plus payload so. It probably doesn't factor in much at all. But what does is insurance. All commercial launches are insured, and the insurance premiums for SpaceX are not substantially higher than other operators. This tells me that either the insurers are idiots, or that they feel that F9 today is nearly as safe as the competitors. Either way, the customers don't care, as it's not them who lose money if a rocket blows up. Hence, the 100-launch order book. Which is more than the other commercial operators put together. > And the final factor is that incumbents have really deep pockets, SpaceX needs venture capital. SpaceX could now run without any additional capital investment. They have a working assembly line, working launch infrastructure, and are cranking out rockets which each make a profit on launch, then land and launch again, and again... And this is why venture capital is so cheap for them. (see https://www.cnbc.com/2018/04/13/equidate-spacex-27-billion-valuation-shows-unlimited-private-funding-available.html https://www.cnbc.com/2018/04/13/equidate-spacex-27-billion-v... ) And they will take in a lot of it to develop BFR. And they will have more of it available than any of those deep pocketed competitors.