Author Topic: With Block 5, SpaceX to increase launch cadence and lower prices  (Read 16671 times)

Offline wannamoonbase

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10 reuses of the same block 5 booster along with 24hr turnaround set for 2019 is very impressive. Theyíll prove the 10x and refurb plan long before they actually need it (if they ever do).

Even if he doesnít agree with it as strategy, Elon is building a huge (candy filled) moat around the launch business.

They've already created a massive barrier to entry and this isn't going to make it any easier.

Ross.
Thereís a pretty big opening for people in the 1 ton payload market. Well below Falcon 9.

But what could a F9 launch cost with such a launch if they can price in RTLS, fairing recovery and maybe upper stage?

I've been pondering the idea of how F9 prices could get broken down by performance required.  Low performance with full reuse of all components upto expendable or just the booster recovery on an ASDS.

Seems there is lots of room for SpaceX to break things down and customize effort to customer requirements.

Edit: Cadence is a hugely important part of lower the fix costs per vehicle.  Plus the closer they get a to launch on demand capability then they'll really put the final squeeze on other commercial providers.
« Last Edit: 05/18/2018 02:31 PM by wannamoonbase »
SpaceX, just a few things planned for 2018: FH, Starlink Prototypes, Block 5, Dragon 2, Increased launch rate.

Offline RDMM2081

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10 reuses of the same block 5 booster along with 24hr turnaround set for 2019 is very impressive. Theyíll prove the 10x and refurb plan long before they actually need it (if they ever do).

Even if he doesnít agree with it as strategy, Elon is building a huge (candy filled) moat around the launch business.

They've already created a massive barrier to entry and this isn't going to make it any easier.

Ross.
Thereís a pretty big opening for people in the 1 ton payload market. Well below Falcon 9.

But what could a F9 launch cost with such a launch if they can price in RTLS, fairing recovery and maybe upper stage?

I've been pondering the idea of how F9 prices could get broken down by performance required.  Low performance with full reuse of all components upto expendable or just the booster recovery on an ASDS.

Seems there is lots of room for SpaceX to break things down and customize effort to customer requirements.

Edit: Cadence is a hugely important part of lower the fix costs per vehicle.  Plus the closer they get a to launch on demand capability then they'll really put the final squeeze on other commercial providers.

"We may be able to get down to a marginal cost for a Falcon 9 launch down, fully considered, down under $5 million or $6 million."
https://www.cnbc.com/2018/05/11/full-elon-musk-transcript-about-spacex-falcon-9-block-5.html

I think this is the "best case" re-use cost Elon envisions for the Falcon 9 including RTLS, Fairing recovery/re-use, and some mythical second stage recovery/re-use. 

Online AncientU

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Drop the mythical second stage recovery and you are at $17-18M.
That should provide sufficient squeeze.
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Offline envy887

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On February 6 Hans Koenigsmann said SpaceX was going to phase out discounts for reused boosters.
And that's fine, but that was in February, and it's May.  Elon's statement is much more recent and it is more definitive.

It may be proven wrong, but right now, it's the best information we have, and it is very specific about numbers ($60 million new, $50 million previously flown) instead of vague qualifiers.
There is nothing inconsistent between what Hans said and Elon said. Hans didn't say prices would be steady, just that used and new boosters wouldn't be different.

Online edkyle99

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I get that you really want to not believe it, but the information we have directly from the CEO of the company, which is not contradicted by any other information from anyone else, tells us that the price for a previously flown booster is now $50 million.

So, you're (currently, with actual evidence, until proven otherwise) wrong.

The only evidence you have here for your opinion is that you don't trust Elon.  Period.
It is not about "trust", really.  I love Elon Musk's audacity and drive.  What he has achieved speaks for itself. 

But.

Any space reporter will tell you that what he says does not always align precisely with what actually happens.  What he says sometimes turns out to be more like the broad brush strokes of an abstract painting.

During the early days he said that Falcon 1 would reuse its first stage and that Falcon 9 would reuse both of its stages beginning on the "second or third flight".  In 2011 he said that Falcon Heavy would fly in 2013.  In 2017, he said that Falcon Heavy would launch Red Dragon to Mars in 2018 and that SpaceX would launch commercial passengers around the Moon in 2018 using a Falcon Heavy. 

He has often talked about costs, of course.  During the early years of Falcon 9, he said that the first stage accounted for 75% of the total rocket costs.  Later he said 70%.  Recently, during the Block 5 press conference, he said that it accounted for 60%.  More broad strokes.

There are many other examples. 

There is no doubt that SpaceX did cut prices for some of the early-adopter booster reuse flights, but given the unaltered web site price listing and the various other reports that say SpaceX has not actually cut the standard price for everyone, I'm just going to have to wait and see.  Maybe Elon was only talking about those early-use discounts, or maybe he was making an unexpected corporate policy announcement.  Given his history it is impossible to know. 

I would love to see $50 million for 5.5 tonnes to GTO.  That would be an astonishing market disruption.

 - Ed Kyle

Online gongora

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I really don't see any conflict between saying a flight with a reflown booster will be around $50M and the listed base price for a new booster is still $62M.

Online abaddon

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There is nothing inconsistent between what Hans said and Elon said. Hans didn't say prices would be steady, just that used and new boosters wouldn't be different.
Elon said "...we already have reduced prices from where they were, from about $60 million to about $50 million for a re-flown booster.".  Reading that sentence, it is clear he is stating that the $50 million applies to a re-flown booster.  If it were $50 million for new or re-flown, then it doesn't make sense that he would qualify it.  Ergo, he is saying $60 million (for a new booster) to "about $50 million" for a re-flown booster.

Contrast that with (your interpretation, which I agree with) what Hans indicated: "But he emphasized that a 'flight-proven" launch should not be priced lower than a new one.'

Whether you believe Elon here or not (separate issue) these are clearly contradictory statements.

I'm done arguing here, I don't think there's much point.  I agree with Ed that we have to wait and see what actually happens here, as the proof will (or won't) be in the pricing.  (Hopefully we get more specific confirmation or a contract where the pricing is made public!)
« Last Edit: 05/18/2018 07:46 PM by abaddon »

Offline wannamoonbase

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"We may be able to get down to a marginal cost for a Falcon 9 launch down, fully considered, down under $5 million or $6 million."
https://www.cnbc.com/2018/05/11/full-elon-musk-transcript-about-spacex-falcon-9-block-5.html

I think this is the "best case" re-use cost Elon envisions for the Falcon 9 including RTLS, Fairing recovery/re-use, and some mythical second stage recovery/re-use. 

That doesn't mean they would sell launches for the marginal cost.  Each launch would still have some portion of fixed costs, expenses and profit.

I don't know what those costs would be, I'm sure it would still be a shockingly low price compared to competitors.
SpaceX, just a few things planned for 2018: FH, Starlink Prototypes, Block 5, Dragon 2, Increased launch rate.

Offline Robotbeat

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10 reuses of the same block 5 booster along with 24hr turnaround set for 2019 is very impressive. Theyíll prove the 10x and refurb plan long before they actually need it (if they ever do).

Even if he doesnít agree with it as strategy, Elon is building a huge (candy filled) moat around the launch business.

They've already created a massive barrier to entry and this isn't going to make it any easier.

Ross.
Thereís a pretty big opening for people in the 1 ton payload market. Well below Falcon 9.

But what could a F9 launch cost with such a launch if they can price in RTLS, fairing recovery and maybe upper stage?

I've been pondering the idea of how F9 prices could get broken down by performance required.  Low performance with full reuse of all components upto expendable or just the booster recovery on an ASDS.

Seems there is lots of room for SpaceX to break things down and customize effort to customer requirements.

Edit: Cadence is a hugely important part of lower the fix costs per vehicle.  Plus the closer they get a to launch on demand capability then they'll really put the final squeeze on other commercial providers.
Maybe just $5m. But a reusable launcher in the 1 ton range could get a per launch cost below $1m.
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Offline kraisee

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Maybe just $5m. But a reusable launcher in the 1 ton range could get a per launch cost below $1m.

The key issue is that with launchers like BFR and New Glenn coming down the pipe offering launch prices that will be lower than even Falcon-1's price was, the launch prices for a small launcher are going to HAVE to be smaller in order to compete.   And that means the total revenues and profits per launch will be equally small.

Next add the fact that any size launcher costs a LOT to develop (F-1 cost what, $100m)

And the real nail in the coffin:   The vast majority of investors want to see "high returns" when they get involved in "high risk" projects like rockets, and you get a very difficult investment proposition.   Understand that most investors interested in projects like this want a reasonably high probability of getting an exit within 7 years that offers a realistic means to make 10x profit.    If they can't get that, they'll just invest in golf courses instead, which are much lower risk and already offer profits in that range.

If you like, try working out just how many launches you'd need to fly to make 10x as much profit compared to the original investment needs, assuming $100m development (ramped-up over five years), $20m annual operational fixed costs after that, and $5m per flight with 40% margin (things get much, much worse assuming smaller launchers at $1m price with 40% margin).   The numbers are eye opening.   For a start, I can tell you that it can't realistically be done in 7 years.

There are exceptional investors who just want their own rocket company for their own reason, but most of those people have already got involved by now, so new entrants are going to find it very difficult indeed.

FYI, I consider RocketLab to have made it in under the wire already, and perhaps Virgin One and Firefly, and Blue are definitely in the running, but anyone else who is not already in, is effectively already out - they just don't know it.   Unless of course they can find that rare "sugar daddy" who's willing to pay lots and lots of big bills without looking at the bottom line for at least a decade.

Ross.
« Last Edit: 05/19/2018 12:35 AM by kraisee »
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Offline Norm38

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Iím getting hung up on the ďincrease launch cadenceĒ part. Letís have an example.
Iridium NEXT 5 launched from Vandy on 3/30. Right before launch, Iridium NEXT 6 was scheduled for late April. Then, after launch it slipped to 5/10 and now itís 5/22. The pad doesnít need nearly two months between launches, and SpaceX has launched within two weeks. So whatís the reason why the launch has slipped three weeks?

Itís because customers are used to a leisurely pace and canít get their payloads to the launch site on time. I think itís going to take a whole lotta work on the payload side to increase launch cadence appreciably. And that the Falcons will be twiddling their thumbs waiting for payloads to show up.

Itís not just Iridium. Lots of launches have been slipping right. By a lot.
« Last Edit: 05/19/2018 03:19 AM by Norm38 »

Offline Lars-J

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Itís because customers are used to a leisurely pace and canít get their payloads to the launch site on time. I think itís going to take a whole lotta work on the payload side to increase launch cadence appreciably. And that the Falcons will be twiddling their thumbs waiting for payloads to show up.

Itís not just Iridium. Lots of launches have been slipping right. By a lot.

If only SpaceX was planning something that they could launch to keep the flight rate up.. hmm. :) (The initial part constellation should start launching in a year or two, right?)

Offline Lars-J

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If you like, try working out just how many launches you'd need to fly to make 10x as much profit compared to the original investment needs, assuming $100m development (ramped-up over five years), $20m annual operational fixed costs after that, and $5m per flight with 40% margin (things get much, much worse assuming smaller launchers at $1m price with 40% margin).   The numbers are eye opening.   For a start, I can tell you that it can't realistically be done in 7 years.

A very good point. And once you take a harder look at some of their business plans - like Vector - you realize that at the low cost launch they are offering, they have to make a LOT of launches per year just to make payroll and stay afloat. Never mind paying back investments. It just doesn't add up for many of the new guys.

FYI, I consider RocketLab to have made it in under the wire already, and perhaps Virgin One and Firefly, and Blue are definitely in the running, but anyone else who is not already in, is effectively already out - they just don't know it.   Unless of course they can find that rare "sugar daddy" who's willing to pay lots and lots of big bills without looking at the bottom line for at least a decade.

Agreed. Now they all like to say that the small-sat market will *explode*... But even if that is true, that doesn't mean that small-sat launchers will see much business, it could all go to the bigger or existing players.

Offline Norm38

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If only SpaceX was planning something that they could launch to keep the flight rate up.. hmm. :) (The initial part constellation should start launching in a year or two, right?)

I put the same onus on SpaceX and Starlink. They canít come in late, canít take weeks getting ready for launch. Canít call time out three days before launch to double check math they should have done months ago.
If they need that much time, then they need to build hangar space and get to the site two months ahead of the scheduled launch date and be ready to go on time. Otherwise they should rightly get bumped for customers who are ready to fly. 

Online gongora

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Iím getting hung up on the ďincrease launch cadenceĒ part. Letís have an example.
Iridium NEXT 5 launched from Vandy on 3/30. Right before launch, Iridium NEXT 6 was scheduled for late April. Then, after launch it slipped to 5/10 and now itís 5/22. The pad doesnít need nearly two months between launches, and SpaceX has launched within two weeks. So whatís the reason why the launch has slipped three weeks?

Itís because customers are used to a leisurely pace and canít get their payloads to the launch site on time. I think itís going to take a whole lotta work on the payload side to increase launch cadence appreciably. And that the Falcons will be twiddling their thumbs waiting for payloads to show up.

Itís not just Iridium. Lots of launches have been slipping right. By a lot.

The recent slips seem to be mostly on the SpaceX side during the block transition, and that will probably continue for at least another month or two.  All goals for Block 5 aren't realized on the day of the first flight.  Check back in 6-12 months.
« Last Edit: 05/19/2018 03:18 PM by gongora »

Offline john smith 19

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Agreed. Now they all like to say that the small-sat market will *explode*... But even if that is true, that doesn't mean that small-sat launchers will see much business, it could all go to the bigger or existing players.
Wasn't that the premise behind the Orbital Pegasus development?

I think it now holds the record for the most expensive ELV in terms of $/lb to orbit of any vehicle.

It all comes down to the fact that the cheapest development option is a VTO ELV.
But
1) You throw the vehicle away every launch, regardless of how flawlessly it performed.
2) You're not just competing with other LV's prices you're also competing with their launch record, which you build one successful launch at a time and which resets when you lose your first payload (doesn't matter where you lose it. The customer has to build another).
3)With the sole mfg/sole operator model your company depends entirely on what it (and it alone) can launch
No other transportation market anywhere operates like this. 

Ever heard of an ELV that continued operating after its mfg company went bust?

Of course not, yet there are a number of aircraft types still flying like this. The operators still use them because there is still enough of a spare parts market for them to draw on to keep them flying.

WRT to the thread title, mabye SX will increase cadence, since enabling that is a key development goal.
Wheather they will lower prices for the small sat market to "explode" is frankly implausible.

Build a fully reusable F9 for $5m a launch and then you might see some serious growth.

As anyone who can build a reasonable spreadsheet model can predict.  :(
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Online oldAtlas_Eguy

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This is probably my favorite subject. Lowering launch costs and prices. I believe that once BLK 5 starts its rapid launch and hardly any refurbish phase the prices will be reorganized by recovery option. RTLS $50M. ASDS $55M. EXP $62M.

The prices for the recovery options would be such that all costs are covered if the booster fails on recovery on its first flight. 1 flight 0 profit but no loss either. 2 flights $15M profit average per flight. 10 flights $27M profit average per flight. With a yearly flight rate of 20 paying customers (this purposeful ignores internal at cost Starlink launches) the total annual profit is $540M.

With this profit and eventually Starlink profits there should be plenty of funds (cash) to do BFR development at a fast pace.
« Last Edit: 05/19/2018 07:17 PM by oldAtlas_Eguy »

Offline kraisee

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Wasn't that the premise behind the Orbital Pegasus development?

I think it now holds the record for the most expensive ELV in terms of $/lb to orbit of any vehicle.

Of currently flying launchers, you're probably right with figures around $40-75K per lb to LEO. But historically, adjusted to consistent dollars, I'd argue Vanguard, Jupiter-C and Juno-II are actually vying for that title with figures between $1.2 to 2.1 million per lb!

Ross.
« Last Edit: 05/19/2018 07:34 PM by kraisee »
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Offline deruch

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This is probably my favorite subject. Lowering launch costs and prices. I believe that once BLK 5 starts its rapid launch and hardly any refurbish phase the prices will be reorganized by recovery option. RTLS $50M. ASDS $55M. EXP $62M.

I would agree, but would include the caveat that for those requesting/requiring a new booster, in addition to any potential scheduling restrictions, they might include a "non-standard service" fee.  This would only be the case if it seemed like too few of their customers were buying preflown.  They need to price such that there is a benefit not only for allowing recovery but also to continue to drive acceptance of preflown until it becomes fully accepted as the norm.  The added fee wouldn't attach just because your payload happened to fly on a new booster but only if it was a customer specified requirement.
Shouldn't reality posts be in "Advanced concepts"?  --Nomadd

Offline Nomadd

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 I'd like to see the F9 depreciation schedule in a year or so.

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