If you assume reuse is completely successful as planned, the marginal cost of a launch would drop immediately and dramatically. Doing a launch with a reused core that's already been written off would cost a small fraction of using a new core. The difference between the reuse marginal cost and the reuse price would still have to contribute as much to the rest of SpaceX balance sheet as a new core launch. Otherwise they're losing money.
That still allows space for both significant price cuts and bigger profits.
Nobody seriously expects SpaceX to save more that 20% in costs through reusing the 1st stage.
Quote from: Nibb31 on 05/28/2016 07:08 amNobody seriously expects SpaceX to save more that 20% in costs through reusing the 1st stage.Except SpaceX perhaps. They are talking about launch prices in the 40 million $ range which would be over 30% price cut and we can safely assume their profit in $, not in % will remain at least the same per launch, or else they would cut less.
Quote from: Ludus on 05/28/2016 03:50 amIf you assume reuse is completely successful as planned, the marginal cost of a launch would drop immediately and dramatically. Doing a launch with a reused core that's already been written off would cost a small fraction of using a new core. The difference between the reuse marginal cost and the reuse price would still have to contribute as much to the rest of SpaceX balance sheet as a new core launch. Otherwise they're losing money.The first stage hardware is only a small part of the cost of the launch service. There are many complex operations involved in launching a rocket: the logistics, the infrastructure, payload integration, stacking, fueling, mission control, pre-launch and post-launch operations, as well as all the administrative overhead and the R&D. The biggest center of cost is the payroll for all the people who do all that work, and none of that is affected by core reuse.Nobody seriously expects SpaceX to save more that 20% in costs through reusing the 1st stage.QuoteThat still allows space for both significant price cuts and bigger profits.It's one or the other really. SpaceX is already the cheapest shop in town with a growing backlog. They have nothing to gain by cutting prices.In fact, if they want their Mars plans to come into fruition, they are going to need deeper pockets, because nobody else is going to pay for them. So their best option would be not to cut prices and to use any cost savings to pay for Musk's expensive hobby.<snip>
The first stage hardware is only a small part of the cost of the launch service. There are many complex operations involved in launching a rocket: the logistics, the infrastructure, payload integration, stacking, fueling, mission control, pre-launch and post-launch operations, as well as all the administrative overhead and the R&D. The biggest center of cost is the payroll for all the people who do all that work, and none of that is affected by core reuse.Nobody seriously expects SpaceX to save more that 20% in costs through reusing the 1st stage.
When I look at the cost of F9 operations optimisticly but with a spreadsheet backing up my estimations I do not see costs (internal to SpaceX and no -profit) getting as low as $20M. My lowest number for costs (not price) [full reusability] is ~$23M with a price of ~$30M. Note this price is also a profit reduction per launch ($7M of profit vs current). But the real shocker here is that FH could have as low of a cost (not price) of $30M and a price of $40M. While that $23M for F9 could be shaved down as much as $3M (refurbishment cost 0) the FH would see a reduction of $9M making an FH cost (not price) nearly the same as an F9 per launch. Litterally just $2M different even if the manufacturing costs are amortized accross 20 launches. On another note is that once SpaceX figures out what their costs are for reuse they could get to the "it does not matter if it is launch #1 or #20 the price is the same". In this scenario, it takes only 2 succesfull flights of a booster to break even with all costs. If the average is 20 flights except the very infrequent failure that would cause the booster to not be reused if recovered or not recovered SpaceX will not have many cases if any where they don't break even on costs for a booster. Once SpaceX is at this point then the all flights have same price and that price is the used booster price. SpaceX sacrifices $1-4M [20 down to 5 flights per booster] in profit, maybe. They could have reduced their costs for the reuse that increased their profit to equal the amortization charge for manufacturing costs.
I think a lot of people here are forgetting that SpaceX is vertically integrated. They do not have significant marginal costs associated with making new Falcon 9 rockets, so calculations of the internal cost of a booster are mostly meaningless unless you consider it as an alternative cost. SpaceX has mostly fixed costs due to keeping their workforce employed, and the marginal costs that they do have (such as range use) would be mostly independent of reuse.Reuse isn't really a way to reduce costs, it is a way to increase the launch rate without increasing the size of the production line. A booster doesn't get any cheaper because you reuse it if the fixed costs and the launch rate stay constant. You need to take advantage of the new capabilities of your launcher.Regarding the cost of the F9/FH variants, I interpret the F9 cost as the price for a new rocket, but which SpaceX is allowed to use in their development program. In other words, the cost is reduced because it helps SpaceX to introduce reuse earlier, which allows them to expand their launch rates in the future making this a direct investment in their growth from their perspective. From an investor's perspective, company growth is a form of profit, so reduced cashflow due to investments in growth are reasonable.For FH it could be either way, but I don't expect SX to ever fly the FH without side core RTLS because of how early the boosters separate.
I think this overstates a few things including how vertically integrated they are.1) Employment is not a fixed cost. People can be laid off or hired as needed. In SpaceX's case, they will likely be re-tasked where possible to other funded ventures such as CC or satellites with no real bearing on the cost per rocket.2) As long as SpaceX is reusing only the first stage, they will need to produce fresh second stages for every launch.3) They do in fact have suppliers, material costs, and transportation costs.
Quote from: dante2308 on 05/30/2016 12:30 amI think this overstates a few things including how vertically integrated they are.1) Employment is not a fixed cost. People can be laid off or hired as needed. In SpaceX's case, they will likely be re-tasked where possible to other funded ventures such as CC or satellites with no real bearing on the cost per rocket.2) As long as SpaceX is reusing only the first stage, they will need to produce fresh second stages for every launch.3) They do in fact have suppliers, material costs, and transportation costs.These points are true but the point remains that the variable costs of an additional launch are the comparison point for reuse savings calculations.1) If the are reusing more and the cannot layoff (I don't think they do the between launches) or need to hire due to increased cadence, that is a variable cost in the short term.2) 2nd Stages are a variable cost until they get to reuse.3) Suppliers, material, and transportation are only variable to the extent they are variable. If they have to rent Range Resources that's variable. If they need more SPAM, that's variable. If they don't integrate transportation, that's variable except for gas and maintenance.
I don't know how much it has been stated, but the real issue I'm seeing is with second stage reuse being tied to Mars transportation. I'm not quite understanding the business case for reusing an interplanetary stage that makes 4 trips per decade (assuming Mars launch windows) unless it also doubles as a well-used transportation system to Earth orbit. However Elon is adamant that the Falcon line will take care of the satellite market for the foreseeable future and has indicated that the second state reuse plans aren't compatible with the Falcon rocket architecture. I attached a porkchop plot showing the delta-v space for Mars as the sum of hyperbolic excess velocities. Sorry, I didn't spend any time making it pretty. The point the plot makes is simply that the Mars windows are not really voluntary.