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It's not just "transaction costs," it's "transaction costs with an incredibly inefficient industry." I'm sure it will still cost SpaceX money, but not as much

It's not just "transaction costs," it's "transaction costs with an incredibly inefficient industry." I'm sure it will still cost SpaceX money, but not as much money as it would cost someone else. My favorite SpaceX story:[1] > Significantly, the Merlin engines—like roughly 80 percent of the components for Falcon and Dragon, including even the flight computers—are made in-house. That’s something SpaceX didn’t originally set out to do, but was driven to by suppliers’ high prices. Mueller recalls asking a vendor for an estimate on a particular engine valve. “They came back [requesting] like a year and a half in development and hundreds of thousands of dollars. Just way out of whack. And we’re like, ‘No, we need it by this summer, for much, much less money.’ They go, ‘Good luck with that,’ and kind of smirked and left.” Mueller’s people made the valve themselves, and by summer they had qualified it for use with cryogenic propellants. > “That vendor, they iced us for a couple of months,” Mueller says, “and then they called us back: ‘Hey, we’re willing to do that valve. You guys want to talk about it?’ And we’re like, ‘No, we’re done.’ He goes, ‘What do you mean you’re done?’ ‘We qualified it. We’re done.’ And there was just silence at the end of the line. They were in shock.” That scenario has been repeated to the point where, Mueller says, “we passionately avoid space vendors.” [1] http://www.airspacemag.com/space/is-spacex-changing-the-rocket-equation-132285884/?page=2 http://www.airspacemag.com/space/is-spacex-changing-the-rock... LATE EDIT Apparently at a Q&A SpaceX said their new factory will make 400 Merlin engines a year. That feels way enough to get out of "prototype" territory and into "economy of scale" territory.

gvb 13y ago
My take on the rationale behind Christophe Bonnal's statement: If you have a market for 400 engines a year and build 400 engines a year, you will get good at building engines and you will have a lot of opportunity to improve your ability to build all those engines. If you have a market of 400 engines a year but reuse each engine 40 times, your build rate will converge on building 10 new engines a year. Once your initial production is done and you are in the sustaining level, you will be back in the boat of all the other rocket companies that are only building ~10 engines a year. The inference is that 10 engines a year doesn't give you the volume to sustain (and refine) your low cost build process. Where I think the argument goes wrong the worst is that Christophe Bonnal is mapping traditional rocket making experience - low rate production of very complex, very expensive hardware - onto SpaceX. SpaceX is rewriting the rules. They appear to have rewritten the rules on the cost of expendable rockets and, with reuse, will rewrite those rules again. That should rewrite the rules on the number of launches since they will be much more affordable. The (counter) premise is that dropping prices of reusable rockets will allow more launches which will absorb what would otherwise be excess SpaceX rocket building capacity.
- mikeash 13y ago
  There's also a different counter premise that if a low production rate ends up being more expensive, they can just go back to throwing rockets away more frequently. That's the fundamental difference from the Shuttle. The Shuttle had to fly dozens of times a year for decades for it to make economic sense. Falcon 9 already makes economic sense when you throw them away, so reusability is just icing on the cake.

gvb 13y ago

My take on the rationale behind Christophe Bonnal's statement: If you have a market for 400 engines a year and build 400 engines a year, you will get good at building engines and you will have a lot of opportunity to improve your ability to build all those engines. If you have a market of 400 engines a year but reuse each engine 40 times, your build rate will converge on building 10 new engines a year. Once your initial production is done and you are in the sustaining level, you will be back in the boat of all the other rocket companies that are only building ~10 engines a year. The inference is that 10 engines a year doesn't give you the volume to sustain (and refine) your low cost build process. Where I think the argument goes wrong the worst is that Christophe Bonnal is mapping traditional rocket making experience - low rate production of very complex, very expensive hardware - onto SpaceX. SpaceX is rewriting the rules. They appear to have rewritten the rules on the cost of expendable rockets and, with reuse, will rewrite those rules again. That should rewrite the rules on the number of launches since they will be much more affordable. The (counter) premise is that dropping prices of reusable rockets will allow more launches which will absorb what would otherwise be excess SpaceX rocket building capacity.

mikeash 13y ago
There's also a different counter premise that if a low production rate ends up being more expensive, they can just go back to throwing rockets away more frequently. That's the fundamental difference from the Shuttle. The Shuttle had to fly dozens of times a year for decades for it to make economic sense. Falcon 9 already makes economic sense when you throw them away, so reusability is just icing on the cake.