SpaceX had a couple of major announcements today. First, CEO Elon Musk revealed a big success and another step toward being able to re-use booster rockets in multiple flights, which will reduce the cost of space flight considerably. He said they were able to successfully soft-land a booster rocket for the first time. The company launched its last Falcon 9 rocket last week.
SpaceX sees “really huge milestone”
According to Musk, no one else has ever soft-landed this type of booster. He said all of their data shows that the rocket landed vertically in the Atlantic Ocean and that the legs deployed as expected.
ValueWalk's Raul Panganiban David Barse, Founder and CEO of XOUT Capital, and discuss his unique approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with XOUT Capital's David Barse
“What SpaceX has done is evolutionary, but not revolutionary,” Musk told reporters. “If we can recover the stage intact and re-launch it, the impact, therefore is truly revolutionary.”
Unfortunately, however, the Falcon 9 booster itself was destroyed because it landed in the middle of a bad storm. Musk said they’re lining up larger boats which will be better able to recover the booster for the next test launch. They’re also going to try to bring it in much closer to land. Musk says he’s “optimistic” that they will be able to improve their accuracy with each successful launch and then land a stage back at Cape Canaveral by the end of the year. In fact, he said they’re aiming to land the rockets with as much accuracy as a helicopter. If that happens, he said they should be able to re-fly the main booster stage sometime next year.
In addition, he said if they are able to land the booster rocket right at the launch site, “in principle,” they should be able to re-launch it the same day it landed.
Elon Musk surprises himself
Musk said he was actually “pleasantly surprised at their successful soft-landing. He said he gave it a “40 to 50% chance of working,” but their data indicates that the booster’s legs deployed and it sat there for about eight seconds before they lost the data because of the storm.
That’s a better outcome than I expected,” he said.
SpaceX to save money on space flight
Musk said as of right now, they aren’t assuming reusability on any of their booster rockets when pricing their rockets. However, he noted that the booster stage is about 70% of the cost of the launch, so being able to reuse it multiple times would significantly reduce the cost of space flight.
He noted that it may take a few years for customers to become comfortable with reusing boosters. However, he said with more test flights, they can prove that the booster stage can be reused safely, thus reducing the cost of each launch by up to 70%.
SpaceX sues U.S. Air Force for the right to compete
At the same press conference, the SpaceX executive also revealed that they are suing the U.S. Air Force in connection with the recent award of space flight contracts without competition. He said the military signed an agreement earlier this year which prevents companies from competing for space flight contracts. He said—as experts ValueWalk interviewed recently have as well—that it just doesn’t make sense that the government would block SpaceX from competing for national security launches.
“It just seems odd that if our vehicle is good enough for NASA and supporting a $100 billion space station,” Musk told reporters, “And it’s good enough for launching NASA science satellites, for launching complex commercial geostationary satellites and really every satellite you can imagine, there’s no reasonable basis for not being capable of launching something quite simple like a GPS satellite.”
Competitors’ rockets are “insanely expensive”
Musk notes that rockets from the United Launch Alliance are four times more expensive than theirs, so U.S. taxpayers are paying billions of dollars “for no reason.” He called the rockets the Air Force is using “insanely expensive” at $400 million a flight. According to Musk, their commercial price is $60 million. They would expect a $30 million increase due to assurance mission requirements the Air Force has, but he said that still makes the other rockets 400% more expensive than theirs.
And, he added, “to add salt to the wound,” the primary engine used in those rockets is made in Russia. Americans may be interested to know also that the man who heads up Russian space activities, Dmitry Rogozin, is actually on the list of Russian officials who are being sanctioned by the U.S. in connection with the invasion of Ukraine.
The SpaceX executive emphasized that they are not suing saying that they should have been awarded the contract. Rather, they’re saying that there should be competition for the launch contracts. He believes that the reason they are able to manufacture rockets for so much less than competitors is because they’re using a 21st century factory, manufacturing processes, and technology. On the other hand, the Atlas V is manufactured in factories built decades ago and uses legacy hardware, some of which dates back to the 70s and 80s.