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SpaceX technology and logistics have increased dollars-to-delta-V efficiency so much that they are benefiting from Jevons Paradox[0], with orbital launch demand

SpaceX technology and logistics have increased dollars-to-delta-V efficiency so much that they are benefiting from Jevons Paradox[0], with orbital launch demand skyrocketing (heh) due to a step change in cost. Even if competitors disappeared, the profit-maximizing price level is unlikely to rise much, as that would choke out a whole emerging sector of launch buyers whose businesses only make sense at a certain $/kg-to-LEO level. [0]: https://en.m.wikipedia.org/wiki/Jevons_paradox https://en.m.wikipedia.org/wiki/Jevons_paradox

sausagefeet 2y ago
> SpaceX technology and logistics have increased dollars-to-delta-V efficiency so much that they are benefiting from Jevons Paradox[0], with orbital launch demand skyrocketing (heh) due to a step change in cost. Do you have support for this? As far as I know, SpaceX hasn't really reduced its customer-facing launch prices much since it's started regularly re-using rockets and last I saw, most demand increase in rocket launches are from SpaceX's own business of Starlink and there the industry at-large has not increased its demand. Amazon Kuiper has bought a as much launch capacity as they can from every supplier but it's unclear if that will pan out. Rocket Labs is the second busiest launcher in the US market with 10 launches in 2023[0]. A McKinsey report on this mentions that SpaceX is both a big driver of demand and supply because of Starlink[1]. And because of constellations, there might be a short-term limit in supply but long term over-abundance. So is there a Joven's Paradox going on in space launches? IMO, no. But, SpaceX is certainly benefiting from being owner of a satellite constellation, which requires tons of launches, and being a launcher so they can do them at-cost. [0] https://payloadspace.com/the-state-of-launch/ https://payloadspace.com/the-state-of-launch/ [1] https://www.mckinsey.com/industries/aerospace-and-defense/our-insights/space-launch-are-we-heading-for-oversupply-or-a-shortfall https://www.mckinsey.com/industries/aerospace-and-defense/ou...
- didgeoridoo 2y ago
  > SpaceX hasn't really reduced its customer-facing launch prices much since it's started regularly re-using rockets Rocket reuse began in 2017, and their pricing per kg has fallen by about half since then. Attributing this directly to reusability isn’t straightforward, since they’ve also introduced new launch vehicles. However, it’s pretty clear that booster reuse is part of their economic model, without which they could never achieve profitability. SpaceX (not) coincidentally being the owner of one of the biggest beneficiaries of reduced launch prices is evidence for, not against, the paradox. Without the cost structure enabled by their launch tech, Starlink is a massive money loser, like every other satellite internet company before it.
  - bryanlarsen 2y ago
    > Rocket reuse began in 2017, and their pricing per kg has fallen by about half since then. The Falcon 9 price per launch was increased from $62M to $67M in 2022. As far as I'm aware, that is the only time the Falcon 9 price ever changed.
    - didgeoridoo 2y ago
      I’m seeing sources all over the place on this, so you could indeed be right. What are your thoughts on the source & quote below? > Since SpaceX began flying the Falcon 9 rocket in 2009, the cost of launch per pound has decreased from $10,000 per kilogram to roughly $2,500. Starship promises to lower the cost of launch even further. Today, the per kilogram cost of a Falcon 9 launch is $1520. Starship’s larger size would allow it to drop that down by 40% to $970 https://georgetownsecuritystudiesreview.org/2023/04/20/t-minus-6-seconds-starship-and-humanitys-next-major-step-into-space/ https://georgetownsecuritystudiesreview.org/2023/04/20/t-min...
      - bryanlarsen 2y ago
        Cost of launch has likely indeed dropped dramatically. But cost != price. Price has stayed roughly constant and SpaceX's profit margin has dramatically increased.
  - numpad0 2y ago
    Falcon 9($69.75m) is priced about the same as Mitsubishi H-IIA(within 20% of $100m) anyway. Performance difference is within ballparks and Mitsubishi is confident that they're going to get successor H3 cost half as much, which is so far just an ambitious goal but they're not full of liars either. H3 is also 100% expendable with zero accommodation for reuse or extreme cadence operations. So it's either SpaceX had long established reuse and charging egregious margins to NASA, or Japanese aerospace labor is practically free, or only first stage recovery technology was realized and cost savings is still an open question. Doesn't the situation look like a mix of all three, I mean, how can it be the case that SpaceX had cut cost by like 80% and US GAO is totally cool with that?
- dotnet00 2y ago
  The reduction is in the rideshares. Due to their launch rate and low internal costs, SpaceX is able to offer a fixed schedule launch capability for small payloads to popular orbits. These small payloads individually have to pay much less than what they would've had to pay in the past, and get a guaranteed ride to space without fussing over the primary mission's needs. As a result SpaceX have eaten up most of the small launch market (eg no messes like having the batteries die on the pad because the only way to get an affordable ride is to fly on the maiden launch of SLS and Boeing isn't flexible enough to be able to charge them) They even have a price calculator and scheduling information on their site for these.
bryanlarsen 2y ago
The cost per kg to orbit on a Falcon 9 is about half of what it was on an Atlas, $7,000/kg vs $15,000/kg That is a significant change, but I do not think it is a radical enough change to significantly alter the market. The radical change was Moore's law. You can have more capability in a tiny cubesat today than you used to have in a satellite that weighed a ton. It was Moore's law that enabled Planet Labs and all of the new LEO constellations, not low launch cost. Starship might provide a radical change in launch costs. More likely SpaceX will keep most of the gain for itself, charging similar prices and pocketing the difference.
- didgeoridoo 2y ago
  I think you may be comparing the Atlas dedicated launch price to SpaceX’s ridesharing price. SpaceX dedicated is closer to $1,500/kg now. It seems plausible that a full order of magnitude difference could support use cases that otherwise wouldn’t make much sense. (I can’t find Atlas ridesharing prices anywhere so apologies if that is indeed their rideshare price).
  - bryanlarsen 2y ago
    Falcon 9 is volume limited, not mass limited. It's difficult to launch more than about 10 tons in a Falcon 9. Starlink does it, but Starlink is the exception, not the rule. For example, the OneWeb launches on Falcon9 were 6,000kg -- they would have launched more satellites per rocket if they could have. $67M / 10 tonnes + fees = $7000/kg.

sausagefeet 2y ago

> SpaceX technology and logistics have increased dollars-to-delta-V efficiency so much that they are benefiting from Jevons Paradox[0], with orbital launch demand skyrocketing (heh) due to a step change in cost. Do you have support for this? As far as I know, SpaceX hasn't really reduced its customer-facing launch prices much since it's started regularly re-using rockets and last I saw, most demand increase in rocket launches are from SpaceX's own business of Starlink and there the industry at-large has not increased its demand. Amazon Kuiper has bought a as much launch capacity as they can from every supplier but it's unclear if that will pan out. Rocket Labs is the second busiest launcher in the US market with 10 launches in 2023[0]. A McKinsey report on this mentions that SpaceX is both a big driver of demand and supply because of Starlink[1]. And because of constellations, there might be a short-term limit in supply but long term over-abundance. So is there a Joven's Paradox going on in space launches? IMO, no. But, SpaceX is certainly benefiting from being owner of a satellite constellation, which requires tons of launches, and being a launcher so they can do them at-cost. [0] https://payloadspace.com/the-state-of-launch/ https://payloadspace.com/the-state-of-launch/ [1] https://www.mckinsey.com/industries/aerospace-and-defense/our-insights/space-launch-are-we-heading-for-oversupply-or-a-shortfall https://www.mckinsey.com/industries/aerospace-and-defense/ou...

didgeoridoo 2y ago
> SpaceX hasn't really reduced its customer-facing launch prices much since it's started regularly re-using rockets Rocket reuse began in 2017, and their pricing per kg has fallen by about half since then. Attributing this directly to reusability isn’t straightforward, since they’ve also introduced new launch vehicles. However, it’s pretty clear that booster reuse is part of their economic model, without which they could never achieve profitability. SpaceX (not) coincidentally being the owner of one of the biggest beneficiaries of reduced launch prices is evidence for, not against, the paradox. Without the cost structure enabled by their launch tech, Starlink is a massive money loser, like every other satellite internet company before it.
- bryanlarsen 2y ago
  > Rocket reuse began in 2017, and their pricing per kg has fallen by about half since then. The Falcon 9 price per launch was increased from $62M to $67M in 2022. As far as I'm aware, that is the only time the Falcon 9 price ever changed.
  - didgeoridoo 2y ago
    I’m seeing sources all over the place on this, so you could indeed be right. What are your thoughts on the source & quote below? > Since SpaceX began flying the Falcon 9 rocket in 2009, the cost of launch per pound has decreased from $10,000 per kilogram to roughly $2,500. Starship promises to lower the cost of launch even further. Today, the per kilogram cost of a Falcon 9 launch is $1520. Starship’s larger size would allow it to drop that down by 40% to $970 https://georgetownsecuritystudiesreview.org/2023/04/20/t-minus-6-seconds-starship-and-humanitys-next-major-step-into-space/ https://georgetownsecuritystudiesreview.org/2023/04/20/t-min...
    - bryanlarsen 2y ago
      Cost of launch has likely indeed dropped dramatically. But cost != price. Price has stayed roughly constant and SpaceX's profit margin has dramatically increased.
- numpad0 2y ago
  Falcon 9($69.75m) is priced about the same as Mitsubishi H-IIA(within 20% of $100m) anyway. Performance difference is within ballparks and Mitsubishi is confident that they're going to get successor H3 cost half as much, which is so far just an ambitious goal but they're not full of liars either. H3 is also 100% expendable with zero accommodation for reuse or extreme cadence operations. So it's either SpaceX had long established reuse and charging egregious margins to NASA, or Japanese aerospace labor is practically free, or only first stage recovery technology was realized and cost savings is still an open question. Doesn't the situation look like a mix of all three, I mean, how can it be the case that SpaceX had cut cost by like 80% and US GAO is totally cool with that?
dotnet00 2y ago
The reduction is in the rideshares. Due to their launch rate and low internal costs, SpaceX is able to offer a fixed schedule launch capability for small payloads to popular orbits. These small payloads individually have to pay much less than what they would've had to pay in the past, and get a guaranteed ride to space without fussing over the primary mission's needs. As a result SpaceX have eaten up most of the small launch market (eg no messes like having the batteries die on the pad because the only way to get an affordable ride is to fly on the maiden launch of SLS and Boeing isn't flexible enough to be able to charge them) They even have a price calculator and scheduling information on their site for these.

bryanlarsen 2y ago

The cost per kg to orbit on a Falcon 9 is about half of what it was on an Atlas, $7,000/kg vs $15,000/kg That is a significant change, but I do not think it is a radical enough change to significantly alter the market. The radical change was Moore's law. You can have more capability in a tiny cubesat today than you used to have in a satellite that weighed a ton. It was Moore's law that enabled Planet Labs and all of the new LEO constellations, not low launch cost. Starship might provide a radical change in launch costs. More likely SpaceX will keep most of the gain for itself, charging similar prices and pocketing the difference.

didgeoridoo 2y ago
I think you may be comparing the Atlas dedicated launch price to SpaceX’s ridesharing price. SpaceX dedicated is closer to $1,500/kg now. It seems plausible that a full order of magnitude difference could support use cases that otherwise wouldn’t make much sense. (I can’t find Atlas ridesharing prices anywhere so apologies if that is indeed their rideshare price).
- bryanlarsen 2y ago
  Falcon 9 is volume limited, not mass limited. It's difficult to launch more than about 10 tons in a Falcon 9. Starlink does it, but Starlink is the exception, not the rule. For example, the OneWeb launches on Falcon9 were 6,000kg -- they would have launched more satellites per rocket if they could have. $67M / 10 tonnes + fees = $7000/kg.