Supposedly, I've heard around here, if Delta IV were to get enough launches, it's costs could come down enough that even SpaceX would have a hard time competing with them.
This does not seem impossible in principle - one ablative engine should be cheaper than 9 regenerative ones. (At least assuming no re-use.)
But if it's true in practice, why does ULA not offer Delta IV at SpaceX prices? Surely customers would jump at a proven rocket with low cost, and their volume would go way up. But ULA doesn't do this, so they must not really believe it. Possible reasons are:
(a) "Enough launches" are more launches than really exist.
(b) They believe SpaceX has underestimated costs, and can't make a profit at current prices.
(c) Requires too much up-front investment (say developing a cheap RL-10 replacement)
My personal guess would be that they believe all of (a), (b), and (c).
Well, from what I've gathered by reading posts from Jim and others who seem to be in the know, most of Delta IV and Atlas V's high costs in reality have been sort of a serious of events that were never part of the original plan.
The EELV competition to replace Titan IV, Atlas II and III, and Delta II and III with a single modular family that would be low cost enough to compete in the commercial market so the government wouldn't have to subsidize it's full costs, but flexible enough to cover the full range of expected government and commercial payloads.
Hence the CCB system of both Atlas V and Delta IV. The idea was to keep just one winner though.
So, first there was the scandal of Boeing steeling some LM information. I think that, and USAF deciding they didn't want to put all of their eggs in one basket with one new and unproven EELV, lead to the forced merger to ULA, and the support of both EELV's.
So now you had two LV's splitting up the government launches that each one by themselves had planned for. Then, in meeting all of the government mandates, and having those low flight rates, they found it difficult to get their prices down enough to compete for commercial payloads. Especially in the early 2000's when the directly government subsidized launchers like Proton, Soyuz, and Ariane V were trying to to get those commercial payloads. ULA had to satisfy the US government first and foremost. And they couldn't be directly subsidized to keep their commercial costs down like those other launchers. (I think there's laws prohibiting that sort of direct government subsidy) So, in order to keep ULA operating both LV's, the government ponied up and paid them enough per launch to cover all of their overhead costs to maintain and support both systems.
I think ULA tried to drop the price of Atlas 401, but they said ArianeSpace just would drop their price more and could do it with ESA subsidies. So ULA just more or less let that business go, and focused exclusively on catering to the government, and the government paid them top dollar to make sure they made enough to stay afloat.
Although I think both Atlas and Delta were designed to make 30-40 CCB's per year originally, that was when they thought there would only be one EELV chosen, and they'd get ALL government launches, and several commercial ones. I think that's where Delta in particuar was supposed to see a pretty dramatic cost decrease.
But...as it turns out, not only were two LV's splitting government payloads, there was only like half the annual launches predicted which actually fly per year. So they cut their production in half again from the original prediction. So instead of 30-40 Delta IV cores per year, there were 3-4 per year. (38 CCB's flown in the last 11 years since the beginning of the program by my count).
The entire overhead of the CCB's, two upper stages, and two launch complexes had to be paid for by those 3-4 CCB's per year. So yea...they were pretty expensive. Not to mention the PWR production line of RS-68's had to be maintianed by just 3-4 engines per year. After RS-25 went away, that would get even worse.
So in short, each EELV originally planned on probably 20 government launches per year and 10-20 commercial launches per year by themselves.
They only got a few commercial launches early on, and none for the last several years. (I think 9 commercial payloads total over the life of both EELV's) And I think there's only been about 5-10 government launches per year, not 20.
And then they have to share those between two different EELV's.
So I think that probably explains most of their high costs. Even then Atlas 401 was fairly affordable, but just couldn't compete with the subsidized ArianeSpace and the Russians for many of those commercial payloads when they'd dump their price below Atlas's.
So...then the question becomes, if SpaceX starts to get government contracts, and ULA is allowed to streamline as they see fit...including retiring one LV...and they keep Delta IV (so they don't have to mess around with the fickle Russians any more), they could cut their overhead maybe in half by closing two Atlas Pads, and downsizing the Atlas CCB production line, as well as Centaur. What would that do for the Costs of Delta IV?
Although ULA would be getting fewer contracts as a few would be going to SpaceX, Delta IV could actually be flying more as there would be no Atlas flights. ULA could/should downsize and cut overhead.
I would think Delta IV prices would come down at least some. Perhaps not enough to be commercially viable, but enough to make them competative with SpaceX...who's government launch prices will probably be higher than commercial, as they'll need to add vertical integration, and follow the myriad of rules and regulations of the USAF to get into compliance with them. Those expenses won't be cheap, and SpaceX will probably let their government launch prices carry that investment, so they can keep their commercial prices low enough that they don't loose business to ArianeSpace and the Russians.
So I expect the prices that the government pays for launches of a vertically integrated Falcon from say pad 39A to be significantly higher than for a commercial launch of a horizontally integrated Falcon from LC-40. Delta IV will probably be inline with that, and USAF will make sure they get enough business to keep Delta flying so they retain redundant space access. Even if it means paying for it.