4 ms·

SpaceX’s launch services have huge margins.

ben_w 4mo ago
Huge negative margins, according to the article: "Starting with the reusable rockets, MS expects SpaceX to eat itself. Launch costs will collapse by more than 99 per cent versus their historical average within 10 years, it says. Operating margin on launches will have jumped to about 40 per cent, from around negative 50 per cent currently, but 40 per cent of less than 1 per cent still isn’t very much." Though as someone (probably JumpCrisscross, can't remember) pointed out a previous time this came up, as SpaceX is selling launch to Starlink, and also own Starlink, which one of the two gets to count as making a profit or a loss is just a matter of preference.
- adastra22 4mo ago
  This is my industry I know it well, apparently much better than these bozos. SpaceX launch is only “unprofitable” only in the accounting sense because they reinvest their profits into Starship. Their actual profit margin for launch of F9 is 62% - 80% depending on configuration. That is a margin unheard of in aerospace. There is literally no competition worth speaking of, and nobody to provide downward price pressure. SpaceX started moving into their own constellations because lower prices open up new markets, and this lets them access those markets without having to lower launch prices. And if you think, as Morgan Stanley seems to, that the only money to be made in space is selling launch of earth orbiting satellites, you’re going to miss out on the boom that is going to make the first quadrillionaire.
  - ben_w 4mo ago
    > And if you think, as Morgan Stanley seems to, that the only money to be made in space is selling launch of earth orbiting satellites, you’re going to miss out on the boom that is going to make the first quadrillionaire. I was with you up to this point. Quadrillionaire? Seriously? On species-wide economy of 0.1Q/year? On a timescale short enough that SpaceX remains a coherent entity and you don't have to account for things like the sum-total risk of nuclear war? Or even just of Musk dying of old age given he's 55?
    - aczerepinski 4mo ago
      Can’t rule out hyperinflation doing some heavy lifting :)
      - ben_w 4mo ago
        Yeah, indeed, I was assuming in constant today-dollars. :)
    - rithdmc 4mo ago
      In which currency? 1 billion Rupiah is less than 60,000 usd ;) A quadrillionaire would only need $60 billion or so.
    - adastra22 4mo ago
      The material wealth of the Earth is only a small, small fraction of the accessible material in the inner solar system, let alone the universe. Starship fundamentally changes the game in ways people aren’t paying attention to because it pattern matches to sci-fi. But the economics are real: power and material far beyond what is available on Earth, on many cases at lower marginal price than terrestrial sources, and 1000x to 100000x reserves.
      - ben_w 4mo ago
        > The material wealth of the Earth is only a small, small fraction of the accessible material in the inner solar system, let alone the universe. And you think you can access that in 30 years? That's the problem here. Market valuations for, say, the USA, do not count the entire value of the nickel and iron down to the planet's core. > Starship fundamentally changes the game in ways people aren’t paying attention to because it pattern matches to sci-fi. But the economics are real: power and material far beyond what is available on Earth, on many cases at lower marginal price than terrestrial sources, and 1000x to 100000x reserves. No, it doesn't. I've done the maths here. At best, and with a better track record than Musk has actually demonstrated, if we use the USA as a metaphor for a the K2 civilisation Musk talks about with lunar-tiling factories making nothing but data centre satellites (done the maths on that too, that's what it would take and even then be borderline on thermodynamics grounds), Starship can be the Mayflower. Not even the Oregon Trail, certainly not the railroad network. And fundamentally it isn't coherent to talk about "lower marginal price" when space mining has a TRL of 1 or 2. Might be cheap eventually, but pricing that in right now would be an error of judgment (aside from anything else, the tech to make it cheap may also make stuff here cheaper). The only way this happens in my lifetime, and I'm younger than Musk, is if someone solves for von Neumann replicators. Which I won't rule out, but Musk hasn't demonstrated any special sauce for this to make me think he'd do it before anyone else.
  - TheOtherHobbes 4mo ago
    China and other competitors have other ideas, even if you're not aware of them. When your whole pitch is that you're commoditising a technology, don't be surprised when you get a commoditised market.
    - small_model 4mo ago
      Their lead is insurmountable, might bleed 1/2% to china but they own launch market and will do for the next century.
      - SideQuark 4mo ago
        You’re claiming in 10 years they made something others won’t for another century? This has no historical precedent. China is going to eat them, just like they ate Teslas insurmountable lead in a few short years.
        small_model 4mo ago
        Whats the best selling car in the world? Model Y at 4x the price of number 2. So nope, your claim died on first hurdle. Try harder
        ben_w 4mo ago
        No, the best selling car in the world is the Toyota RAV4: https://en.wikipedia.org/wiki/Toyota_RAV4 https://en.wikipedia.org/wiki/Toyota_RAV4 The best selling EV brand in the world is BYD: https://cleantechnica.com/wp-content/uploads/2026/05/2026-03-World-Top-20-Brand-March-scaled.png https://cleantechnica.com/wp-content/uploads/2026/05/2026-03... The best selling EV model in the world is the Model Y. Saying "Oh but the Model Y" is like how when the original iMac came out, Apple turned out to be selling the single most popular model of retail PC in the US despite Apple also having 3% of the world market. Putting a lot of wood behind few arrows does make those arrows look bigger.
        4mo ago
  - adgjlsfhk1 4mo ago
    > SpaceX started moving into their own constellations because lower prices open up new markets, and this lets them access those markets without having to lower launch prices the alternate take here is that even at current prices, falcon 9 is more than capable of completely filling space demand which makes building a >10x bigger vehicle seem kind of dumb
    - stoneman24 4mo ago
      I think the main idea for starship is fully reusable ( which falcon 9 isn’t) and much larger capacity (both volume and mass). Driving down the cost of getting mass to orbit. I googled and got the following costs per kg to orbit Falcon approx $3000 / kg Starship (early) $600 / kg Starship (target) $ 100 / kg If they can achieve the target, it’s transformative. The Chinese will follow the lead and be available for some commercial customers but the majority of the market will be SpaceX.
      - ben_w 4mo ago
        Starship would be really good even if they can't make it reusable, but still hit the early-user price tags and capacity to LEO they're talking about for expendable-mode launches, even if they then stop improving. But unless there's demand for launching a lot more stuff, that's not going to help them make a lot of money. I can buy into a vision of several competing Starlink-like constellations. Can't buy into one about space-based data centres. And we need a lot more demonstrations of space colony precursor tech before I'm going to even have a strong opinion about the economics of space colonies*, either for or against: they're technically feasible, but so too is one on the sea floor, or the middle of Antarctica; and there's people who already build homes for themselves in the middle of the Sahara and at high altitude on mountains, but these aren't *huge* money-makers, just standard boring ones. * they are cool though; if Musk had actually delivered on the Mars flights that were supposed to have already arrived two years ago, and also not turned out to be who he turned out to be, I'd have considered being an early Martian: https://techcrunch.com/2020/12/01/elon-musk-says-spacex-will-attempt-uncrewed-mars-flight-in-two-years-human-landing-in-four-to-six/ https://techcrunch.com/2020/12/01/elon-musk-says-spacex-will...
  - close04 4mo ago
    > This is my industry I know it well How far ahead is SpaceX compared to the competition, a decade? More? Less? Is the gap closing or growing? > Their actual profit margin for launch of F9 is 62% - 80% depending on configuration. That is a margin unheard of in aerospace. Do you expect they maintain these margins on launch and whatever services they deliver from space as that gap is closing? Is their first mover advantage practically unassailable because it's in space? Tesla built the EV market and are having their lunch eaten by the competition.
    - adastra22 4mo ago
      The rest of the industry is about 10 years beyond SpaceX. But note that they are where SpaceX was a decade ago, which is not the same thing as “in 10 years they will catch up.” The gap is getting larger year by year, not smaller.
      - JKCalhoun 4mo ago
        "The gap is getting larger year by year, not smaller." You keep saying this—you'll have to explain. Very little in the world has ever worked like this—the opposite has generally been the case.
        adastra22 4mo ago
        No it’s not on me to explain why. I’ve just been watching this company since 2008, and seen them break ahead of the competition and then stay ahead as they move faster than anyone else. I’m saying the historical trend line has that gap widening. That’s a statement of fact, no “why” involved. If you want to know the why’s I suggest reading Eric Berger’s two books Liftoff and Reentry.
      - tavavex 4mo ago
        > The gap is getting larger year by year, not smaller. Why? Logically it would seem that learning how to do something that's already been done would be easier than discovering it. SpaceX has already done a lot of the work and has shown the others that it's possible and how they do it. Why won't the others catch up? I can't think of any industry that has a market leader that only gets further away from their competition forever.
verzali 4mo ago
Demand is low. Remove Starlink and look how often they launch. And look at how it has changed over the years. There's a reason they went so hard into Starlink.

ben_w 4mo ago

Huge negative margins, according to the article: "Starting with the reusable rockets, MS expects SpaceX to eat itself. Launch costs will collapse by more than 99 per cent versus their historical average within 10 years, it says. Operating margin on launches will have jumped to about 40 per cent, from around negative 50 per cent currently, but 40 per cent of less than 1 per cent still isn’t very much." Though as someone (probably JumpCrisscross, can't remember) pointed out a previous time this came up, as SpaceX is selling launch to Starlink, and also own Starlink, which one of the two gets to count as making a profit or a loss is just a matter of preference.

adastra22 4mo ago
This is my industry I know it well, apparently much better than these bozos. SpaceX launch is only “unprofitable” only in the accounting sense because they reinvest their profits into Starship. Their actual profit margin for launch of F9 is 62% - 80% depending on configuration. That is a margin unheard of in aerospace. There is literally no competition worth speaking of, and nobody to provide downward price pressure. SpaceX started moving into their own constellations because lower prices open up new markets, and this lets them access those markets without having to lower launch prices. And if you think, as Morgan Stanley seems to, that the only money to be made in space is selling launch of earth orbiting satellites, you’re going to miss out on the boom that is going to make the first quadrillionaire.
- ben_w 4mo ago
  > And if you think, as Morgan Stanley seems to, that the only money to be made in space is selling launch of earth orbiting satellites, you’re going to miss out on the boom that is going to make the first quadrillionaire. I was with you up to this point. Quadrillionaire? Seriously? On species-wide economy of 0.1Q/year? On a timescale short enough that SpaceX remains a coherent entity and you don't have to account for things like the sum-total risk of nuclear war? Or even just of Musk dying of old age given he's 55?
  - aczerepinski 4mo ago
    Can’t rule out hyperinflation doing some heavy lifting :)
    - ben_w 4mo ago
      Yeah, indeed, I was assuming in constant today-dollars. :)
  - rithdmc 4mo ago
    In which currency? 1 billion Rupiah is less than 60,000 usd ;) A quadrillionaire would only need $60 billion or so.
  - adastra22 4mo ago
    The material wealth of the Earth is only a small, small fraction of the accessible material in the inner solar system, let alone the universe. Starship fundamentally changes the game in ways people aren’t paying attention to because it pattern matches to sci-fi. But the economics are real: power and material far beyond what is available on Earth, on many cases at lower marginal price than terrestrial sources, and 1000x to 100000x reserves.
    - ben_w 4mo ago
      > The material wealth of the Earth is only a small, small fraction of the accessible material in the inner solar system, let alone the universe. And you think you can access that in 30 years? That's the problem here. Market valuations for, say, the USA, do not count the entire value of the nickel and iron down to the planet's core. > Starship fundamentally changes the game in ways people aren’t paying attention to because it pattern matches to sci-fi. But the economics are real: power and material far beyond what is available on Earth, on many cases at lower marginal price than terrestrial sources, and 1000x to 100000x reserves. No, it doesn't. I've done the maths here. At best, and with a better track record than Musk has actually demonstrated, if we use the USA as a metaphor for a the K2 civilisation Musk talks about with lunar-tiling factories making nothing but data centre satellites (done the maths on that too, that's what it would take and even then be borderline on thermodynamics grounds), Starship can be the Mayflower. Not even the Oregon Trail, certainly not the railroad network. And fundamentally it isn't coherent to talk about "lower marginal price" when space mining has a TRL of 1 or 2. Might be cheap eventually, but pricing that in right now would be an error of judgment (aside from anything else, the tech to make it cheap may also make stuff here cheaper). The only way this happens in my lifetime, and I'm younger than Musk, is if someone solves for von Neumann replicators. Which I won't rule out, but Musk hasn't demonstrated any special sauce for this to make me think he'd do it before anyone else.
- TheOtherHobbes 4mo ago
  China and other competitors have other ideas, even if you're not aware of them. When your whole pitch is that you're commoditising a technology, don't be surprised when you get a commoditised market.
  - small_model 4mo ago
    Their lead is insurmountable, might bleed 1/2% to china but they own launch market and will do for the next century.
    - SideQuark 4mo ago
      You’re claiming in 10 years they made something others won’t for another century? This has no historical precedent. China is going to eat them, just like they ate Teslas insurmountable lead in a few short years.
      - small_model 4mo ago
        Whats the best selling car in the world? Model Y at 4x the price of number 2. So nope, your claim died on first hurdle. Try harder
        ben_w 4mo ago
        No, the best selling car in the world is the Toyota RAV4: https://en.wikipedia.org/wiki/Toyota_RAV4 https://en.wikipedia.org/wiki/Toyota_RAV4 The best selling EV brand in the world is BYD: https://cleantechnica.com/wp-content/uploads/2026/05/2026-03-World-Top-20-Brand-March-scaled.png https://cleantechnica.com/wp-content/uploads/2026/05/2026-03... The best selling EV model in the world is the Model Y. Saying "Oh but the Model Y" is like how when the original iMac came out, Apple turned out to be selling the single most popular model of retail PC in the US despite Apple also having 3% of the world market. Putting a lot of wood behind few arrows does make those arrows look bigger.
        4mo ago
- adgjlsfhk1 4mo ago
  > SpaceX started moving into their own constellations because lower prices open up new markets, and this lets them access those markets without having to lower launch prices the alternate take here is that even at current prices, falcon 9 is more than capable of completely filling space demand which makes building a >10x bigger vehicle seem kind of dumb
  - stoneman24 4mo ago
    I think the main idea for starship is fully reusable ( which falcon 9 isn’t) and much larger capacity (both volume and mass). Driving down the cost of getting mass to orbit. I googled and got the following costs per kg to orbit Falcon approx $3000 / kg Starship (early) $600 / kg Starship (target) $ 100 / kg If they can achieve the target, it’s transformative. The Chinese will follow the lead and be available for some commercial customers but the majority of the market will be SpaceX.
    - ben_w 4mo ago
      Starship would be really good even if they can't make it reusable, but still hit the early-user price tags and capacity to LEO they're talking about for expendable-mode launches, even if they then stop improving. But unless there's demand for launching a lot more stuff, that's not going to help them make a lot of money. I can buy into a vision of several competing Starlink-like constellations. Can't buy into one about space-based data centres. And we need a lot more demonstrations of space colony precursor tech before I'm going to even have a strong opinion about the economics of space colonies*, either for or against: they're technically feasible, but so too is one on the sea floor, or the middle of Antarctica; and there's people who already build homes for themselves in the middle of the Sahara and at high altitude on mountains, but these aren't *huge* money-makers, just standard boring ones. * they are cool though; if Musk had actually delivered on the Mars flights that were supposed to have already arrived two years ago, and also not turned out to be who he turned out to be, I'd have considered being an early Martian: https://techcrunch.com/2020/12/01/elon-musk-says-spacex-will-attempt-uncrewed-mars-flight-in-two-years-human-landing-in-four-to-six/ https://techcrunch.com/2020/12/01/elon-musk-says-spacex-will...
- close04 4mo ago
  > This is my industry I know it well How far ahead is SpaceX compared to the competition, a decade? More? Less? Is the gap closing or growing? > Their actual profit margin for launch of F9 is 62% - 80% depending on configuration. That is a margin unheard of in aerospace. Do you expect they maintain these margins on launch and whatever services they deliver from space as that gap is closing? Is their first mover advantage practically unassailable because it's in space? Tesla built the EV market and are having their lunch eaten by the competition.
  - adastra22 4mo ago
    The rest of the industry is about 10 years beyond SpaceX. But note that they are where SpaceX was a decade ago, which is not the same thing as “in 10 years they will catch up.” The gap is getting larger year by year, not smaller.
    - JKCalhoun 4mo ago
      "The gap is getting larger year by year, not smaller." You keep saying this—you'll have to explain. Very little in the world has ever worked like this—the opposite has generally been the case.
      - adastra22 4mo ago
        No it’s not on me to explain why. I’ve just been watching this company since 2008, and seen them break ahead of the competition and then stay ahead as they move faster than anyone else. I’m saying the historical trend line has that gap widening. That’s a statement of fact, no “why” involved. If you want to know the why’s I suggest reading Eric Berger’s two books Liftoff and Reentry.
    - tavavex 4mo ago
      > The gap is getting larger year by year, not smaller. Why? Logically it would seem that learning how to do something that's already been done would be easier than discovering it. SpaceX has already done a lot of the work and has shown the others that it's possible and how they do it. Why won't the others catch up? I can't think of any industry that has a market leader that only gets further away from their competition forever.

verzali 4mo ago

Demand is low. Remove Starlink and look how often they launch. And look at how it has changed over the years. There's a reason they went so hard into Starlink.