Comment by ben_w
20 hours 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.
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.
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.
China (and others, e.g. Blue Origin and Rocket Lab) are rushing to catch up to where SoaceX was 10 years ago. They are moving faster than anyone in aerospace has ever moved before, but SpaceX is still accelerating faster than that. By the time they catch up, the game will have again changed.
SpaceX and NVIDIA share this trait. They out-innovate, and know only one speed: the speed of light. The tortoise can only beat the hare if the hare takes a nap, and nobody is napping at SpaceX.
I’m not a fanboy. I have criticisms of SpaceX. But you are pattern matching to the common story of startups getting complacent and being surpassed by up-comers in China and elsewhere. But the innovators dilemma only applies if the innovator stops innovating. Two decades on, SoaceX is still innovating as much as they always have.
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Their lead is insurmountable, might bleed 1/2% to china but they own launch market and will do for the next century.
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You clearly don't know the market. China is no competition just on geopolitical terms. And I am very aware of the competition and have followed each competitor basically since its founding. It will take many years before competitors will be fully read and even then their launch rates will be tiny in comparison. And by then SpaceX will have moved on.
But of course this is all dwarfed by AI stuff financially so its basically irrelevant. SpaceX could stop all launch sales tomorrow with zero impact on its financials.
> 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?
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.
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Can’t rule out hyperinflation doing some heavy lifting :)
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In which currency? 1 billion Rupiah is less than 60,000 usd ;)
A quadrillionaire would only need $60 billion or so.
> 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
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.
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> 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.
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.
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