

Debunking SpaceX's Low Cost Model - physcab
http://www.thedatascientist.com/2010/06/09/debunking-spacexs-low-cost-model

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Synthetase
This article is awfully disingenuous for claiming to discredit SpaceX.

He claims that the cost of the Delta IV is lower than the Falcon 9 which is a
misleading on multiple levels. First, SpaceX is a relatively new company which
lacks the engineering legacy of Delta I-IV to build on. That they managed to
launch the Falcon 9 on day 1 is nothing short of astounding. Scaling and
legacy will reduce costs which he conveniently ignores.

Secondly, he claims that the $1.6B NASA COTS contract is more than the stated
launch price. While it is true that a Delta IV launch is similar to the cost
of NASA's launch configuration, we must remember that its different LAUNCH
CONFIGURATIONS. Delta IV just shoves a satellite into orbit. Falcon 9 must
dock with the ISS which is a different can of worms. A more proper comparison
would be Falcon 9 with Constellation which is horrendously expensive to
operate and over development budget.

This is before he degenerates into truly unforgivable pile of FUD, asking why
couldn't "SpaceX obtain a contract from either a commercial or governmental
entity for the development of the Falcon 1? Where are the private investors?
It could be perhaps that there is no market."

Quite frankly, that's a load of disingenuous BS that does nothing more than to
point to the author's lack of research.

One of the principles SpaceX was predicated on was the private development of
rockets, not the cost-plus model the author assumes. Besides Musk himself,
they got John Doerr and several other big name VCs. The fact that SpaceX was
develop rockets with just private money is a sign of strength, not weakness.

Another nice bit of artifice on the author's part is his loudly wondering
where the launch market is. Looking at their launch manifest, they already
have over 25 launches lined up. It will much more once the company has
matured.

Long story short: this author is full of shit.

~~~
physcab
Thanks for your kind comments :)

First, I never claimed DeltaIV's cost was _lower_ than Falcon 9's (or
discrediting SpaceX)...I just said Falcon 9 was about market cost and probably
won't be close to their $50m stated price. That price probably is the cost of
the rocket anyways, not the mission. And no, I don't think the two craft are
truly comparable because their missions are different, but I'm just arguing
SpaceX's rockets won't be dramatically lower in price all things considered.

Second, looking at their launch manifest
(<http://www.spacex.com/launch_manifest.php>) most of those flights are for
the Falcon 9 with the customer being NASA (the government). How many of those
customers are purchasing the _low-cost_ Falcon 1 rocket? 1 maybe 2? 8% of
their manifest is low-cost flight. The rest are for (probably) market-cost
flight. Do you have any links to suggest that the market for low-cost
spaceflight is booming?

My point being: Most people think SpaceX is the future of spaceflight when it
looks like they are just another NASA contractor. What's horrifying to me is
how they were able to _win_ the NASA COTS $1.6bn contract with absolutely no
record of mission success.

EDIT: Another interesting tid-bit- NASA reportedly spends about $114m per a
Soyuz mission (<http://forum.nasaspaceflight.com/index.php?topic=13441.0>).
That docks with the ISS as well and the Soyuz is arguably the most efficient
and reliable rocket out there.

~~~
radu_floricica
Very good point about market price vs costs. But I see the NASA contract as a
form of investment. NASA needs a domestic provider, and SpaceX is a good match
- good enough to be worth paying at _current_ market price.

What will happen when the technology is proven and ready to scale is a
completely different game. As the GP said, the configuration and special
requirements will likely keep the price up for government contracts. On the
private end however the new market price will depend heavily on how much this
technology can be scaled and how the market will react to a lower price. The
exact figure is known to nobody, but enough variables are being changed to
have a real hope that it will be sensibly lower.

~~~
physcab
That may be true for a typical business but I doubt SpaceX will be able to
take advantage of economies of scale. There are simply not enough payloads to
dramatically lower the development cost, which is reflected in the cost of
other commercial vehicles.

