SpaceX Founder Lays Out Facts About The Company's Costs
Guest Editorial By Elon Musk
Whenever someone proposes to do something that has never been
done before, there will always be skeptics. So when I started
SpaceX, it was not surprising when people said we wouldn't succeed.
But now that we've successfully proven Falcon 1, Falcon 9 and
Dragon, there's been a steady stream of misinformation and doubt
expressed about SpaceX's actual launch costs and prices.
Falcon 9
As noted last month by a Chinese government official, SpaceX
currently has the best launch prices in the world and they don't
believe they can beat them. This is a clear case of American
innovation trumping lower overseas labor rates. I recognize that
our prices shatter the historical cost models of government-led
developments, but these prices are not arbitrary, premised on
capturing a dominant share of the market, or "teaser" rates meant
to lure in an eager market only to be increased later. These prices
are based on known costs and a demonstrated track record, and they
exemplify the potential of America's commercial space industry.
Here are the facts:
The price of a standard flight on a Falcon 9 rocket is $54
million. We are the only launch company that publicly posts this
information on our website (www.spacex.com). We have signed many
legally binding contracts with both government and commercial
customers for this price (or less). Because SpaceX is so vertically
integrated, we know and can control the overwhelming majority of
our costs. This is why I am so confident that our performance will
increase and our prices will decline over time, as is the case with
every other technology.
Falcon 1
The average price of a full-up NASA Dragon cargo mission to the
International Space Station is $133 million including inflation, or
roughly $115m in today's dollars, and we have a firm, fixed price
contract with NASA for 12 missions. This price includes the costs
of the Falcon 9 launch, the Dragon spacecraft, all operations,
maintenance and overhead, and all of the work required to integrate
with the Space Station. If there are cost overruns, SpaceX will
cover the difference. (This concept may be foreign to some
traditional government space contractors that seem to believe that
cost overruns should be the responsibility of the taxpayer.)
The total company expenditures since being founded in 2002 through
the 2010 fiscal year were less than $800 million, which includes
all the development costs for the Falcon 1, Falcon 9 and Dragon.
Included in this $800 million are the costs of building launch
sites at Vandenberg, Cape Canaveral and Kwajalein, as well as the
corporate manufacturing facility that can support up to 12 Falcon 9
and Dragon missions per year. This total also includes the cost of
five flights of Falcon 1, two flights of Falcon 9, and one up and
back flight of Dragon. The Falcon 9 launch vehicle was developed
from a blank sheet to first launch in four and half years for just
over $300 million. The Falcon 9 is an EELV class vehicle that
generates roughly one million pounds of thrust (four times the
maximum thrust of a Boeing 747) and carries more payload to orbit
than a Delta IV Medium.
The Dragon spacecraft was developed from a blank sheet to the
first demonstration flight in just over four years for about $300
million. Last year, SpaceX became the first private company, in
partnership with NASA, to successfully orbit and recover a
spacecraft. The spacecraft and the Falcon 9 rocket that carried it
were designed, manufactured and launched by American workers for an
American company. The Falcon 9/Dragon system, with the addition of
a launch escape system, seats and upgraded life support, can carry
seven astronauts to orbit, more than double the capacity of the
Russian Soyuz, but at less than a third of the price per seat.
SpaceX has been profitable every year since 2007, despite
dramatic employee growth and major infrastructure and operations
investments. We have over 40 flights on manifest representing over
$3 billion in revenues.
These are the objective facts, confirmed by external auditors.
Moreover, SpaceX intends to make far more dramatic reductions in
price in the long term when full launch vehicle reusability is
achieved. We will not be satisfied with our progress until we have
achieved this long sought goal of the space industry. For the first
time in more than three decades, America last year began taking
back international market-share in commercial satellite launch.
This remarkable turn-around was sparked by a small investment NASA
made in SpaceX in 2006 as part of the Commercial Orbital
Transportation Services (COTS) program. A unique public-private
partnership, COTS has proven that under the right conditions, a
properly incentivized contractor-even an all-American one-can
develop extremely complex systems on rapid timelines and a
fixed-price basis, significantly beating historical
industry-standard costs.
China has the fastest growing economy in the world. But the
American free enterprise system, which allows anyone with a better
mouse-trap to compete, is what will ensure that the United States
remains the world's greatest superpower of innovation.