You're assuming they want to pass the entire savings on to customer immediately. I think they will eventually, but first need to recover some of the many millions they spent developing a recoverable and reuseable system.Musk has said Quote The boost stage is roughly 70% of the cost of a launch. So, if we're able to reuse it and refly it with minimal work between flights, and customers are comfortable with that - and it might take a few years for customers to get comfortable with that - then obviously there's as much as - ultimately - a 70% reduction from where things are today.
The boost stage is roughly 70% of the cost of a launch. So, if we're able to reuse it and refly it with minimal work between flights, and customers are comfortable with that - and it might take a few years for customers to get comfortable with that - then obviously there's as much as - ultimately - a 70% reduction from where things are today.
<snip>Absent better information, I'm inclined to believe that the 30% is temporary and that their standard list price for launch services when reuse is no longer considered any different from non-reuse will be the price that maximizes their profit minus the amount of their profit they are strategically willing to concede for various selfish reasons (PR, general boost to the industry).It would be extraordinarily suprising to me if they passed anything close to full savings on to customers.
Is there something public that supports your belief they will eventually pass the entire savings to the customer?...
Well, cheaper is one way to say it, another way to say it is we're trying to make space accessible to everyone. We want it to be such that if you want to go to orbit or beyond, then you can do so. We want to open up space for humanity, and in order to do that, space must be affordable.
100 launches per year at 60m a launch = 6 billion dollars a year!6 billion a year should pay for a lot.Of course to get 100 launches per year? Is there that many launches from all providers now? At some point we need more people needing things launched. Which means lower prices.
You're assuming they want to pass the entire savings on to customer immediately. I think they will eventually, but first need to recover some of the many millions they spent developing a recoverable and reuseable system.
Quote from: AC in NC on 08/21/2016 07:30 pm<snip> standard list price will be the price that maximizes their profit minus the amount of their profit they are strategically willing to concede for various selfish reasons It would be extraordinarily suprising to me if they passed anything close to full savings on to customers.The price that the current market can bear is significantly higher than they are charging, and a significant amount of their 'profit' is being rolled back into R&D for future unprofitable-to-the-extreme adventures.Maximizing their profit doesn't seem to be their business model to date... certainly that could change, but I don't see any indication of that new M.O. Do you?
<snip> standard list price will be the price that maximizes their profit minus the amount of their profit they are strategically willing to concede for various selfish reasons It would be extraordinarily suprising to me if they passed anything close to full savings on to customers.
That statement there by EM reads to me as information about the cost to SpaceX rather than a price (cost) to the customer.
There is a several major drivers of very big incentive for SpaceX to book profits.
Is it not the case that the GS 30% discount is simply the "bait" to hook the customers necessary to proof reliable reuse such that they can go back to selling "launch services" rather than having the customer worry about the booster details?
Absent better information, I'm inclined to believe that the 30% is temporary and that their standard list price for launch services when reuse is no longer considered any different from non-reuse will be the price that maximizes their profit minus the amount of their profit they are strategically willing to concede for various selfish reasons (PR, general boost to the industry).
It would be extraordinarily suprising to me if they passed anything close to full savings on to customers.
It is easy to get confused between cost savings and prices. Personally, I think spacex will make the reused booster prices just low enough to gauge how much growth room there is for lower priced launches. Aside from trying to prove the launch market can grow, they probably will maximize profit as much or more then other launch providers for the reused vehicles. The motivation for this would be to fund the development of their mars architecture. ...
Quote from: AC in NC on 08/21/2016 07:30 pmThere is a several major drivers of very big incentive for SpaceX to book profits. That would be the VC investors and any planned IPO.
QuoteAbsent better information, I'm inclined to believe that the 30% is temporary and that their standard list price for launch services when reuse is no longer considered any different from non-reuse will be the price that maximizes their profit minus the amount of their profit they are strategically willing to concede for various selfish reasons (PR, general boost to the industry).IOW Charge customers what the market will bear and keep the rest of the profits. Just like every launch vehicle services company.
QuoteIt would be extraordinarily suprising to me if they passed anything close to full savings on to customers.To get significant market growth SX has to lower it's prices for some of its launches to see price elasticity. How much is significant is a tricky question. Some think 30$ is significant. Some do not.
I'm simply trying to suggest, passing along all savings is IN MY OPINION very unlikely whereas others have said they expect that to be the case. They have very valid reasons to not pass along a reasonably sized portion of the savings, reasons THAT FURTHER THE BROADER MISSION OF SPACE-X and reasons that are not Greedy or Just like every other Launch Vehicle Services Company.
...I'm simply trying to suggest, passing along all savings is IN MY OPINION very unlikely whereas others have said they expect that to be the case. They have very valid reasons to not pass along a reasonably sized portion of the savings, reasons THAT FURTHER THE BROADER MISSION OF SPACE-X and reasons that are not Greedy or Just like every other Launch Vehicle Services Company.
Quote from: AC in NC on 08/26/2016 01:34 pmI'm simply trying to suggest, passing along all savings is IN MY OPINION very unlikely whereas others have said they expect that to be the case. They have very valid reasons to not pass along a reasonably sized portion of the savings, reasons THAT FURTHER THE BROADER MISSION OF SPACE-X and reasons that are not Greedy or Just like every other Launch Vehicle Services Company. Agreed, the action (maximizing profit in the near term) is similar to other launch services companies, but the motivation is vastly different. Spacex has a goal of developing the technology, equipment, and infrastructure to allow human space travel at the planetary level and beyond. They will do what best forwards that goal. I would also argue that waiting for the huge price cut till they have a fully reusable vehicle also makes the most sense if their goal was only to reduce launch prices drastically. It does not make sense to expand the production of expendable components to the scale to meet the theoretical demand that they would need to close the business case for a minimum priced falcon 9 when they could spend that same capital to develop a fully reusable vehicle. Full reuse also should have a much better ratio of profit to fixed infrastructure costs even at the lower price.
... * If it is true that SpaceX is losing lots of money on each flight, they'll be out of business soon. ...
I did say EVENTUALLY in the post that started all this. Eventually, a number of factors will force them to pass on a significant majority of the launch cost reductions in the form of price cuts to a significant number of customers (though perhaps not all customers). Those factors could be competition, a desire to dramatically increase launch rate, and the simple fact that Mars colonization isn't feasible at current prices.For instance, I doubt they will charge internal customers (e.g. CommX) prices much above reuseable cost for a launch. However, Falcon 9 might be retired or significantly different from it's current form by the time they do that for external customers.
Quote from: envy887 on 08/21/2016 01:03 amYou're assuming they want to pass the entire savings on to customer immediately. I think they will eventually, but first need to recover some of the many millions they spent developing a recoverable and reuseable system.Musk has said Quote The boost stage is roughly 70% of the cost of a launch. So, if we're able to reuse it and refly it with minimal work between flights, and customers are comfortable with that - and it might take a few years for customers to get comfortable with that - then obviously there's as much as - ultimately - a 70% reduction from where things are today. Is there something public that supports your belief they will eventually pass the entire savings to the customer?That statement there by EM reads to me as information about the cost to SpaceX rather than a price (cost) to the customer. There is a several major drivers of very big incentive for SpaceX to book profits. Is it not the case that the GS 30% discount is simply the "bait" to hook the customers necessary to proof reliable reuse such that they can go back to selling "launch services" rather than having the customer worry about the booster details?Absent better information, I'm inclined to believe that the 30% is temporary and that their standard list price for launch services when reuse is no longer considered any different from non-reuse will be the price that maximizes their profit minus the amount of their profit they are strategically willing to concede for various selfish reasons (PR, general boost to the industry).It would be extraordinarily suprising to me if they passed anything close to full savings on to customers.