- March 28, 2024
- Posted by: admin
- Category: Emilio Cozzi
Elon Musk’s company has introduced a new philosophy to space launches (with significant support from NASA and Defense), turning the industry into a competition and, for now, forcing the world to play catch-up.
BY EMILIO COZZI
“The reason there’s little demand for space flights is because they’re absurdly expensive… the problem is that rockets are not reusable.” These words from Elon Musk evoke a chapter similar to many others in human history. The manner in which space has been “democratized” – quotation marks necessary – in which the costs of launching satellites and other payloads into orbit have been reduced, is quite straightforward and pertains to technological progress and market laws. More competition means greater supply and therefore lower prices.
Based on a precious, very valuable good, the potential of which until a few years ago was still unclear: access to and permanence in orbit. Or assuming it was already clear years ago but at times not ripe for space launches to become part of everyday life. Then, as the need was felt – for telecommunications, broadcast transmissions, navigation, and positioning – the market did the rest, starting from a (para)state monopoly to trigger a flurry of commercial activities at lower costs.
Market spelled as SpaceX
To ignite the revolution and force all others, willing or unwilling, to follow suit was Space Exploration Technologies Corporation, better known as SpaceX, the company founded 22 years ago by Musk. Through rigorous “field testing” with launches, errors, and improvements one after another – the script also applied in the development of Starship – SpaceX has perfected the most reliable vehicle on the market. Not satisfied there, it began to do what no one had attempted before: reuse rockets. After the first three failures with the Falcon 1 launched from the Marshall Islands atoll where SpaceX grew in its early years, came success, and then the unstoppable rise of the Falcon 9. Since 2010, the launcher has recorded one complete failure, another partial, and an explosion on the pad but not during a launch. In addition to about 300 consecutive successful missions.
In 2015, Musk’s company really began to change the game: it happened when the first stage of a Falcon 9, after pushing 11 small satellites into space, returned and landed back on the ground, exactly on the “X” painted on the landing zone at Cape Canaveral. Unlike its successors, that launcher never flew again; it became a monument displayed at the intersection of Crenshaw Boulevard and Jack Northrop Avenue in Hawthorne, California, next to the company’s headquarters. SpaceX’s business plan took shape gradually: reuse rockets at least a dozen times. Over 40 have been produced with a record of 19 flights for a single first stage, the B1058, ironically destroyed not by a failed landing but during recovery operations. Most have returned to a sea platform off the coasts of Florida or California.
The company’s philosophy could be summarized with two quotes. The first explains why it makes sense to reuse launchers: “Throwing away multimillion-dollar rocket stages after every mission makes as much sense as throwing away a 747 after every flight.” The other is a comparison between a Ferrari and a utility vehicle: “We’ve often been asked: if you reduce costs, don’t you reduce reliability? This is totally ridiculous […] I bet a thousand to one that if you buy a Honda Civic, it won’t break down in the first year of operation. You can have an affordable and reliable car, and the same goes for rockets.” Two statements that immediately lead to considering the savings from mass production of many vehicles. SpaceX utilizes many, also and especially to launch satellites of the gigantic Starlink constellation (which is starting to turn a profit). This last point signifies how the company likely aims in the long term to become a space service provider rather than an extra-atmospheric hardware manufacturer.
NASA as the Incubator
SpaceX’s proverbial “open secret” is that what makes the company competitive is an approach that, in the face of a lack of adequate demand until a few years ago, no one had attempted. This circumstance – the lack of a market need – is in turn tied to the inability to foresee the broad spectrum of opportunities that later emerged like blades of grass.
SpaceX has de facto created and proposed a standard and introduced for the first time in the launcher sector real scalability. Mass production is a factor contrasted with tailor-made designs. Another significant factor in SpaceX’s approach (and success) is the ability to reduce the time to reach an operational service by testing in the field, learning from mistakes, and improving one verification after another. The difference is undeniable compared to, for example, the development of NASA’s Space Launch System, the result of a “traditional development” of the industry, capable of taking off after lengthy delays only on the occasion of the inaugural flight that also marked the kickoff of the Artemis program. Similar to the development and production dynamics – and to some extent, a daughter of the same contractual approach – of the Apollo era, none of the parts of NASA’s new launch system (central stage, boosters, and upper stage) is designed to fly twice. Not even the Orion capsules, designated for crew transport, will be reused in their entirety. Starship, on the other hand, is to be the first completely reusable launch system from the first stage – the Super Heavy – to the spaceship itself – the Starship.
It’s worth remembering: SpaceX came from almost nowhere.
Founded in 2002, it was born from the idea of a new millionaire – the then thirty-year-old Musk’s personal wealth came from the sale of his first entrepreneurial ventures, the most recent being PayPal – obsessed with the desire to bring humanity to Mars and fresh from numerous rejections, if not derisory responses, from state and Russian giants. Musk reacted to these rejections by deciding to build a rocket himself.
The development of the Falcon 1 cost $90 million and was prolonged while the times matured for everything in the sector to be ready for a radical change.
Moreover, already in September 2008, just before SpaceX made its fourth and potentially last attempt to launch the Falcon, the future President of the United States, Barack Obama, had been briefed by his space policy advisor, Lori Garver.
A NASA veteran, Garver had suggested – not without risks given SpaceX’s unenthusiastic score up to that point – to change the approach to space and rocket construction. The planned “Constellation” program approved by George W. Bush’s administration, tasked with completing the International Space Station and returning to the Moon “no later than 2020”, was based on cost-plus contracts awarded for the construction of most components to United Launch Alliance, the joint venture formed in 2006 by Lockheed Martin and Boeing. Within a few years, costs had more than doubled, and nothing guaranteed the bleeding would stop.
Garver thus proposed to the future White House occupant to abandon the Constellation program and leave to private companies the development of means capable of transporting astronauts beyond the atmosphere.
As demonstrated by the Constellation program, the exclusive club of space contractors had no interest in taking risks, developing creative solutions, and cutting times and costs. It was no coincidence if the elite was mostly made up of the same big names – Boeing and Lockheed Martin – involved in the space business since the Apollo era, if not before.
“With this system, you’re not going to Mars. It leads you to conclude nothing. If you never complete a cost-plus contract, you remain attached to the government’s teats forever.” Musk again.
His actions translated, for starters, into the reassignment of a contract awarded to Kistler Aerospace, of which SpaceX won a substantial part after a lawsuit filed directly against NASA. It was not just a legal dispute with a surprising ending; it was the first creak of an economic-industrial structure that had been rigid for sixty years, the first victory of the revolutionary David against the institutionalized Goliaths of space, or out of metaphor, the opening of the hole through which the adjective new would accommodate itself in front of space economy.
At that point, “everyone went crazy,” to put it in Musk’s words. Because the result was NASA’s funding of the Commercial Orbital Transportation Services (COTS) program for the development of an orbital resupply and astronaut transport vehicle. SpaceX began to win everything, literally. NASA acted as an “incubator” for the strategy of a company born in the country that, for military, civil, and scientific reasons, historically carries out more missions in orbit and beyond (among those with a capitalist economy), primarily by solving the root problem of everything: the lack of demand for space launches.
The Incubator Creates Demand
By stepping in to replace what was a monopoly, SpaceX has devoured slices of the domestic market. First with cargo resupplies to the International Space Station, then with the Commercial Crew Program, in which it was funded by the U.S. space agency to develop the new Crew Dragon, the vehicle that in 2020 restored America’s capability to launch astronauts from national territory nine years after the end of the Space Shuttle program.
From 2006 to 2018, within the framework of the Commercial Crew Program, SpaceX received over $52 billion in NASA contracts. From 2020, the manned transport service and the multibillion-dollar contracts for launches operated on behalf of U.S. intelligence and Defense were also added – thanks to a Reuters scoop a few days ago, it was revealed that with an $18 billion contract, SpaceX has been developing since 2021 a satellite constellation for military uses: Starshield.
More than once, competitors (especially in Europe) have complained about what they consider “unfair competition” from SpaceX and, indirectly, from the American system. The accusation
is that of selling at inflated prices in the U.S. to be able to practice lower rates abroad, the so-called “dumping.” Solving this knot is complex, although one can get an idea by looking at the accounts.
SpaceX’s Price List
In November 2023, the US Space Force signed contracts with ULA and SpaceX to launch military assets with a series of launches. The former receives $13 billion for 11 missions. The latter, $123 billion for ten missions. One fact immediately stands out: the prices per launch are almost identical for the two companies. That’s already news.
Is it due to ULA, which has developed a new launcher, the Vulcan, whose price should be about $100 million per launch, or to SpaceX, which inflates rates for public entities?
In more detail for SpaceX, it involves seven missions with the Falcon 9 (the commercial declared price per launch is $67 million in 2022, with some adjustment that may have occurred) and three with the Falcon Heavy (last available price: $97 million). Rounding up, the total would be $790 million; thus, the Defense pays over $400 million more than the market price. And there’s a not insignificant detail: SpaceX recovers almost all the boosters it launches. Then reuses them. In contrast, the Vulcan is still totally expendable. Put another way, it seems that deals with American public entities are a gold mine for Musk.
In 2020, the U.S. Air Force spent $316 million for a single launch, that of a satellite to be sent into orbit in 2022 on a Falcon Heavy. In that case, SpaceX’s Chief Operating Officer Gwynne Shotwell justified the enormity of the figure by mentioning a series of additional services and infrastructures necessary for the launch of a strategic asset. Again, it’s the paradigm capable of making all the difference in the world between a custom launch and a standard commercial launch. Like the one the European Space Agency purchased for a very precious instrument, the Euclid space telescope. Finding itself short of available launchers after the failure of the first commercial mission of Vega C and the delays in the development of Ariane 6, ESA had to find an alternative in a short time. And SpaceX solved the impasse in a way impossible for others, as highlighted by Mike Healy, head of ESA’s scientific projects: “We signed the contract on January 31, 2023, five months before the launch. The first informal contact with SpaceX dated back to May 2022. We concluded in just over a year; in Europe, it would have taken two or three.”
This consideration should be added to the issue of increasingly competitive costs overseas. “The total cost of the SpaceX launch was around 70 million euros – Healy specified – including the measures necessary for cleanliness requirements. The cost of a launch with Ariane 6 will instead be around 90 million.” Here again, it would be appropriate to note a substantial difference: Ariane 6 will not be reusable. The two launchers, the Falcon 9 and the new Ariane, are comparable in power (22 tons in low Earth orbit) but very different in price.
Going back to simple divisions: a SpaceX launch with the Falcon 9 – $67 million – can mean an expense of $3,000 for every kilo of payload transported. With the Falcon Heavy, it even drops to about $1,500. A huge difference, for example, with the first reusable U.S. space vehicle (and orbiter). The Space Shuttle promised a revolution: the system was supposed to offer substantial savings given the shuttle’s (orbiter’s) reusability. In reality, it ended up costing an average of over a billion per launch and about $30,000 per kilo, six times more than the colossal Saturn V. Compared to the Falcon 9, ten times more expensive, 20 compared to the Falcon Heavy.
If we launch together…
Twenty-two tons – the mass a Falcon 9 can carry into low Earth orbit – is a lot. Few have payloads so heavy to launch into low orbit, especially for a single satellite. That’s why Starlink has come to deploy up to 60 satellites in a single launch, totaling almost 20 tons. What has changed the space launch market, lowering the price, is precisely the sharing of the same launcher by different clients. The most “extreme” example is the rideshare missions with which SpaceX more or less regularly delivers to space dozens of smallsats, each weighing between tens and hundreds of kilograms. The price per kilo in this case goes up to $6,000. But those who need to launch a 50-kilogram satellite have little choice but to pay, instead of $300,000 for a rideshare launch, maybe $75 million for a dedicated mission with a lighter launcher like Rocket Lab’s Electron.
It’s a matter of opportunity and how much one is willing to invest to ensure a dedicated service (tailor-made) or to adapt to conditions and timings not chosen but with more advantageous prices (in rideshare). Until recently unavailable on the market, today the choice guarantees an increasingly wide audience of stakeholders access to space. And to SpaceX, the control of a substantial portion of a new market.
This, with some simplification, is SpaceX today: a company that, as the third part of this overview will recount, others are chasing.