Who will compete with SpaceX? The last two and next two years.

[Owlon]

A tenfold reduction of current F9 launch prices is not possible with just a reused first stage. The first stage is only ~70% of the cost. So even if you were to have a free first stage (impossible), you would only reduce costs by 70%. Assuming that block 5 is much easier to refurbish, you might see a ~30-40% reduction in cost. (still significant!) 

A tenfold reduction is cost requires a fully reusable launch system, and won't be achievable until the next launch system after F9/FH.

Stage 2 recovery hardware might be reasonable as a "Secondary payload" on Falcon heavy, and they are already making progress on recovering fairings.

Spot on. The fairing is another 10% or so of the total cost. Fairing reuse, which seems quite likely to succeed, should bump that up to ~80% theoretical max cost reduction without touching S2 reuse--and stage 2 reuse remains a possibility based on recent comments by Musk. This ignores some external costs, but I would take a semi-educated guess and say those add up to maybe 10% of the total current total.

Just 10%? That's exceedingly optimistic, IMO. With 5000 (or closer to 6000) employees - and still growing, they have quite a bit of overhead they need income for in order to be cash flow positive. Their payroll alone is likely over half a billion per year! They also need profit to roll into development of the Mars system.

I'm talking about the cost of the actual rocket and launch, not the price SpaceX will need to charge to stay solvent. The 10% I'm guessing at there are things like range fees and payload integration. This was a discussion about the limits of cost reduction on Falcon 9, which I'm saying land around 80% without S2 and 90% with it. With a high enough launch rate, SpaceX's internal cost for a launch should approach that. Realistically, I don't expect to see Falcon 9 launches sold for less than maybe 40 million for the foreseeable future

My "spot on" was mostly directed at the fact fairing and possible S2 reuse were sort of getting tossed out of the discussion.

[AncientU]

Because SpaceX has MUCH bigger plans than just launching 20 rockets a year. Try more like 200.

200 per year is simply fantasy.  Even 20 annually for more than a few years (as SpaceX clears its delayed backlog) is optimistic.

In all history only two launch vehicle families have managed to fly more than 20 times per year for any length of time:  R-7 (1960s-1990s) and Thor (1960s).  R-7 peaked at roughly 55 per year during the 1980s, but the payloads that drove that cadence (Cold War film return recon) are gone.  During this decade, all of the rockets in all of the world's countries combined have only managed an average of a bit less than 83 orbital attempts per year.

 - Ed Kyle

Thanks again for the statistical bar that SpaceX will be measured against.  50 or 100 launches of a powerful vehicle like F9 per year would put them in a class of their own.  Wait for it...

[HMXHMX]

In all history only two launch vehicle families have managed to fly more than 20 times per year for any length of time:  R-7 (1960s-1990s) and Thor (1960s).  R-7 peaked at roughly 55 per year during the 1980s, but the payloads that drove that cadence (Cold War film return recon) are gone.  During this decade, all of the rockets in all of the world's countries combined have only managed an average of a bit less than 83 orbital attempts per year.

Those launch rates are based on historical demand.  So when in all history has there been demand for constellations of several thousand LEO-MEO satellites (along with annual replenishment rates in the hundreds+)?  Never.  If the demand (money) is there, the launches will proceed apace.

Motorola and Teledesic together were looking at launch rates that were comparable in the 1997 time frame.  Been there, bid those, business never materialized.

[joek]

Motorola and Teledesic together were looking at launch rates that were comparable in the 1997 time frame.  Been there, bid those, business never materialized.

Not comparable; we're talking thousands vs. hundreds--and those being launched-owned-operated by a single provider.  That single owner-operator (e.g. SpaceX) will determine whether their business case closes; if no, they won't; if yes, they will.

[Coastal Ron]

In all history only two launch vehicle families have managed to fly more than 20 times per year for any length of time:  R-7 (1960s-1990s) and Thor (1960s).  R-7 peaked at roughly 55 per year during the 1980s, but the payloads that drove that cadence (Cold War film return recon) are gone.  During this decade, all of the rockets in all of the world's countries combined have only managed an average of a bit less than 83 orbital attempts per year.

Those launch rates are based on historical demand.  So when in all history has there been demand for constellations of several thousand LEO-MEO satellites (along with annual replenishment rates in the hundreds+)?  Never.  If the demand (money) is there, the launches will proceed apace.

Motorola and Teledesic together were looking at launch rates that were comparable in the 1997 time frame.  Been there, bid those, business never materialized.

I would imagine that part of the reason those planned businesses never materialized is that, in part, launch costs ate up so much of their startup costs.

If true, then the lower launch costs that SpaceX will be able to provide (especially for their own satellite service) could allow such a business to be profitable today. Plus the need for satellite services, and the types of services that can be provided, may have changed too - certainly we demand to be connected today moreso no matter where we go than we did 20 years ago...

[su27k]

A tenfold reduction of current F9 launch prices is not possible with just a reused first stage. The first stage is only ~70% of the cost. So even if you were to have a free first stage (impossible), you would only reduce costs by 70%. Assuming that block 5 is much easier to refurbish, you might see a ~30-40% reduction in cost. (still significant!) 

A tenfold reduction is cost requires a fully reusable launch system, and won't be achievable until the next launch system after F9/FH.

Stage 2 recovery hardware might be reasonable as a "Secondary payload" on Falcon heavy, and they are already making progress on recovering fairings.

Spot on. The fairing is another 10% or so of the total cost. Fairing reuse, which seems quite likely to succeed, should bump that up to ~80% theoretical max cost reduction without touching S2 reuse--and stage 2 reuse remains a possibility based on recent comments by Musk. This ignores some external costs, but I would take a semi-educated guess and say those add up to maybe 10% of the total current total.

Just 10%? That's exceedingly optimistic, IMO. With 5000 (or closer to 6000) employees - and still growing, they have quite a bit of overhead they need income for in order to be cash flow positive. Their payroll alone is likely over half a billion per year! They also need profit to roll into development of the Mars system.

I'm talking about the cost of the actual rocket and launch, not the price SpaceX will need to charge to stay solvent. The 10% I'm guessing at there are things like range fees and payload integration. This was a discussion about the limits of cost reduction on Falcon 9, which I'm saying land around 80% without S2 and 90% with it. With a high enough launch rate, SpaceX's internal cost for a launch should approach that. Realistically, I don't expect to see Falcon 9 launches sold for less than maybe 40 million for the foreseeable future

My "spot on" was mostly directed at the fact fairing and possible S2 reuse were sort of getting tossed out of the discussion.

I wouldn't be so sure, I think we may see $30M or even $20M once they perfected first stage and fairing reuse. The important point is they won't be slashing price across the board, there will be price segmentation. Being reusable rocket the segmentation strategy would naturally be # of reuses and performance to orbit. We're already seeing it on the website price where performance of FH is limited to 8t to GTO even though it is capable of much more.

In the future I think we may be seeing $60M price for first use, mainly for government and conservative customers; then $50M for 2nd use for the braver traditional customers, between these two the hardware production cost would already be covered, this would free them to offer very low price for 3rd and later uses, maybe with a performance cap to segment the market and enable easy RTLS.

[Oli]

Remember when SpaceX said Falcon 9 would be priced at $35 million?

That price was quoted way back in 2007 for 3.1mT to GTO. As of 2008 they were quoting $35M for <3.5mT to GTO, but $55M for 4.5-5.5mT to GTO.

Today, which is 9 years later, they offer up to 5.5mT to GTO for $62M - they have simplified their pricing. That is a 13% increase over a 9 year period. Using the Inflation Calculator the cumulative rate of inflation was actually 13.7%, so SpaceX pricing has actually FALLEN over that 9 year period, not risen.

That's what the fact show.

The facts also show that SpaceX is nowhere near reducing launch costs by an order of magnitude (ignoring the several orders of magnitude reduction required for Mars for the moment). It's all fugazi.

True. And they will continue to not dramatically lower their prices.

As of now they already undercut *everyone* on price, except Soyuz (iirc 3 tons to GTO) and small launchers. With their current prices, they can't service all their potential customers yet, need to up the launch rate some x2.

Why on Earth would Musk voluntarily cut his revenue today by lowering prices even more?

What you're saying is that SpaceX has given up on inducing demand by lowering prices. That is of course possible (but impossible to tell). Not so long ago when I suggested SpaceX would not lower prices much below their competitors, people were getting rather upset and I was told SpaceX is not like any other company. How times have changed.

[Coastal Ron]

Not so long ago when I suggested SpaceX would not lower prices much below their competitors, people were getting rather upset and I was told SpaceX is not like any other company. How times have changed.

I think you are conflating two things.

1. SpaceX launch prices, which have risen less than the rate of inflation for max GTO payloads over the past 9 years, are already well below their competition, and especially below the prices that ULA charges. So that proves they are not raising their prices to come close to competitors.

2. SpaceX has already stated publicly that they will reduce their prices for re-flown cores, and the debate on this part of the thread was whether their price decreases would get them down into the range of being able to claim that they have reduced the price to access space "by an order of magnitude". The only way to gauge that is to agree on what the starting point should be, and no one seems able to establish a definitive starting point, but it's clear that SpaceX is continuing to LOWER their prices, not RAISE them as you imply they would.

[meekGee]

Because SpaceX has MUCH bigger plans than just launching 20 rockets a year. Try more like 200.

200 per year is simply fantasy.  Even 20 annually for more than a few years (as SpaceX clears its delayed backlog) is optimistic.

In all history only two launch vehicle families have managed to fly more than 20 times per year for any length of time:  R-7 (1960s-1990s) and Thor (1960s).  R-7 peaked at roughly 55 per year during the 1980s, but the payloads that drove that cadence (Cold War film return recon) are gone.  During this decade, all of the rockets in all of the world's countries combined have only managed an average of a bit less than 83 orbital attempts per year.

 - Ed Kyle

But Ed, when the R-7 had its run, according to your logic, that was pure fantasy too, since it's never happened before...

You need to learn from history, not just quote it.  If history teaches us anything, it is that scales of operation (in many fields) that seem fantasy, regularly become reality mere years later.  Not every time of course, but often enough that your sense of what's fantastical is a very poor gauge into the future.

SpaceX has an unprecedented launch system, unprecedented near term plans (constellation), and unprecedented ambitions (Mars).  If anyone can take the next step, it is them.

[vapour_nudge]

Because SpaceX has MUCH bigger plans than just launching 20 rockets a year. Try more like 200.

200 per year is simply fantasy.  Even 20 annually for more than a few years (as SpaceX clears its delayed backlog) is optimistic.

In all history only two launch vehicle families have managed to fly more than 20 times per year for any length of time:  R-7 (1960s-1990s) and Thor (1960s).  R-7 peaked at roughly 55 per year during the 1980s, but the payloads that drove that cadence (Cold War film return recon) are gone.  During this decade, all of the rockets in all of the world's countries combined have only managed an average of a bit less than 83 orbital attempts per year.

 - Ed Kyle

But Ed, when the R-7 had its run, according to your logic, that was pure fantasy too, since it's never happened before...

You need to learn from history, not just quote it.  If history teaches us anything, it is that scales of operation (in many fields) that seem fantasy, regularly become reality mere years later.  Not every time of course, but often enough that your sense of what's fantastical is a very poor gauge into the future.

SpaceX has an unprecedented launch system, unprecedented near term plans (constellation), and unprecedented ambitions (Mars).  If anyone can take the next step, it is them.

Yes, you need to learn from history too just as you instructed Ed. We've never seen 200 orbital launches worldwide. I think it was in the late 60s or early 70s when it approached 150, but to predict 200 launches by SpaceX in a year is just FANtasy

[AncientU]

Because SpaceX has MUCH bigger plans than just launching 20 rockets a year. Try more like 200.

200 per year is simply fantasy.  Even 20 annually for more than a few years (as SpaceX clears its delayed backlog) is optimistic.

In all history only two launch vehicle families have managed to fly more than 20 times per year for any length of time:  R-7 (1960s-1990s) and Thor (1960s).  R-7 peaked at roughly 55 per year during the 1980s, but the payloads that drove that cadence (Cold War film return recon) are gone.  During this decade, all of the rockets in all of the world's countries combined have only managed an average of a bit less than 83 orbital attempts per year.

 - Ed Kyle

But Ed, when the R-7 had its run, according to your logic, that was pure fantasy too, since it's never happened before...

You need to learn from history, not just quote it.  If history teaches us anything, it is that scales of operation (in many fields) that seem fantasy, regularly become reality mere years later.  Not every time of course, but often enough that your sense of what's fantastical is a very poor gauge into the future.

SpaceX has an unprecedented launch system, unprecedented near term plans (constellation), and unprecedented ambitions (Mars).  If anyone can take the next step, it is them.

Getting to space was pure fantasy 30 years before the R-7 'run.'  Repeating their feat 30 years later seems less fantastic -- in fact, is seems odd that it isn't routinely done.

The stagnation that smothered the launch industry for decades is what is fantastic (-ly sad).

Oh, wasn't Shuttle supposed to fly weekly (50x per year)?  Possibly the failure to reach that program goal -- and its tarnishing the concept of reusability -- caused the launch trough.

[FutureSpaceTourist]

200 per year is certainly fantasy without significant re-use. I think SpaceX and Blue Origin are the only organisations on a path that could enable such a high launch frequency within, say, 10 years. Of course there has to be the demand too. Mega-constellations may provide that but too early to say if they will be successful.

[ZachF]

Because SpaceX has MUCH bigger plans than just launching 20 rockets a year. Try more like 200.

200 per year is simply fantasy.  Even 20 annually for more than a few years (as SpaceX clears its delayed backlog) is optimistic.

In all history only two launch vehicle families have managed to fly more than 20 times per year for any length of time:  R-7 (1960s-1990s) and Thor (1960s).  R-7 peaked at roughly 55 per year during the 1980s, but the payloads that drove that cadence (Cold War film return recon) are gone.  During this decade, all of the rockets in all of the world's countries combined have only managed an average of a bit less than 83 orbital attempts per year.

 - Ed Kyle

But Ed, when the R-7 had its run, according to your logic, that was pure fantasy too, since it's never happened before...

You need to learn from history, not just quote it.  If history teaches us anything, it is that scales of operation (in many fields) that seem fantasy, regularly become reality mere years later.  Not every time of course, but often enough that your sense of what's fantastical is a very poor gauge into the future.

SpaceX has an unprecedented launch system, unprecedented near term plans (constellation), and unprecedented ambitions (Mars).  If anyone can take the next step, it is them.

Yes, you need to learn from history too just as you instructed Ed. We've never seen 200 orbital launches worldwide. I think it was in the late 60s or early 70s when it approached 150, but to predict 200 launches by SpaceX in a year is just FANtasy

I think around 100/year is possible with the Falcon architecture and S1/F re-use. Half of that will come from SpaceX's own constellation. The Hawthorne facility is making 20 Falcons a year now (20 S1, 20 S2, 180 M1D, 20 M1DV), If a Block 5 can be re-used 10 times they would only need 10/year to launch 100 times. They would need to tool up for around 2 Stage 2s per week, but the number of Merlin engines would be about the same (90 M1D and 100 M1V) just more Vac variants.

Cost could drop substantially under this. Especially to SpaceX internally. They wouldn't need too many more employees. Those 5000 Employees Lars-J was talking about above? with 8 launches that's ~600 employees per launch. This year it looks like they're going to throw up 20 birds, so that's 250 employees per launch. In the above scenario, even if they have to hire another 1000 employees, that's 60 employees per launch. An order of magnitude reduction.

They aren't going to get to >200 until they have a full-reusable architecture, like ITS.

[ZachF]

Because SpaceX has MUCH bigger plans than just launching 20 rockets a year. Try more like 200.

200 per year is simply fantasy.  Even 20 annually for more than a few years (as SpaceX clears its delayed backlog) is optimistic.

In all history only two launch vehicle families have managed to fly more than 20 times per year for any length of time:  R-7 (1960s-1990s) and Thor (1960s).  R-7 peaked at roughly 55 per year during the 1980s, but the payloads that drove that cadence (Cold War film return recon) are gone.  During this decade, all of the rockets in all of the world's countries combined have only managed an average of a bit less than 83 orbital attempts per year.

 - Ed Kyle

But Ed, when the R-7 had its run, according to your logic, that was pure fantasy too, since it's never happened before...

You need to learn from history, not just quote it.  If history teaches us anything, it is that scales of operation (in many fields) that seem fantasy, regularly become reality mere years later.  Not every time of course, but often enough that your sense of what's fantastical is a very poor gauge into the future.

SpaceX has an unprecedented launch system, unprecedented near term plans (constellation), and unprecedented ambitions (Mars).  If anyone can take the next step, it is them.

Getting to space was pure fantasy 30 years before the R-7 'run.'  Repeating their feat 30 years later seems less fantastic -- in fact, is seems odd that it isn't routinely done.

The stagnation that smothered the launch industry for decades is what is fantastic (-ly sad).

Oh, wasn't Shuttle supposed to fly weekly (50x per year)?  Possibly the failure to reach that program goal -- and its tarnishing the concept of reusability -- caused the launch trough.

Space has been mostly a government-dominated niche, it will need the private sector's competition to drive it to the next level. If you told people in the 60s that the world economy would expand by a factor of around 5 by 2010 and asked them what we'd be doing in space then, the answers would be depressing.

Space tourism, asteroid mining... once you get the private sector on board and there's money to be made, the progress is going to be astounding. Launch rates and equivalent tonnage to LEO during the old Soviet heyday is going to look quaint, like 1800s steel production. Even the governmental sector will get a huge boost, because $18 billion goes a lot farther with $100/kg to LEO than $20,000/kg/LEO.

[AncientU]

Depends on your definition of "compete".  Only if "assured access" is part of the "compete" equation--assuming SpaceX does not FU.  That is, one provider is subsidized either explicitly or implicitly to ensure assured access; e.g., guaranteed X launches or via ELC.

The definition of "assured access" in the law is simpler --

(1) the availability of at least two space launch vehicles (or families of space launch vehicles) capable of delivering into space any payload designated by the Secretary of Defense or the Director of National Intelligence as a national security payload; and
(2) a robust space launch infrastructure and industrial base.

Nothing about financial arrangements, other than that whatever they are, they must keep two providers in business. So if, say, Blue and SpaceX are both certified, and getting by without subsidies or guarantees, there's no reason to provide either. (See https://www.law.cornell.edu/uscode/text/10/2273. And note also that ULA is no longer getting ELC, though it still has some guaranteed business over the next few years through the somewhat controversial block buy.)

ULA is still getting ELC.  For Phase 1A competitions, though, they have to bid without it. Same with Phase 2 competitions.

The USAF catch phrase for keeping one particular provider in business is 'Managed Competition' -- better known as allocation -- wouldn't be needed (and it is needed) if free and open competition would produce the same result.

New article on this topic:

When Will Boeing and Lockheed Martin Lose This $1 Billion Government Subsidy?

The Air Force will award ULA one final ELC contract this year -- probably in September, as has been its past practice. But this will be the last such $1 billion subsidy ULA receives. Going forward, instead of dividing its spending between one contract for EELV and a second contract for launching rockets "under the requirements contract terms" of EELV, the Air Force will pay just one consolidated price per space launch -- one single "P-1 line" item.

https://www.fool.com/investing/2017/07/09/when-will-boeing-lockheed-martin-lose-1-billion-su.aspx

The USAF should evenly divide this final ELC payment between ULA and SpaceX, since they now share the responsibility for maintaining the industrial base.  This would help 'level the playing field'.  So far, SpaceX has gotten Zero for it's half of that base, while ULA is dropping Delta IV-M (for which they've been subsidized) and getting separate subsidies to transition off the RD-180.

[Roy_H]

Is ULA still getting the $1B/year government subsidy just to stay in business?

SpaceX has said it cost them about $1B to develop re-use up to this point and they have suffered two lost launches and a major re-build of LC40 (probably totals another $1B). This is a lot of money to recover. SpaceX cannot both lower launch prices and earn enough to cover these expenses. I don't expect much in price reduction for re-used boosters for several years. This will give competitors some breathing room.

Competing launchers are already planning their response to the new reality of having to compete on a cost basis. I don't see any of the major players discussed going out of business.

[alexterrell]

200 per year is certainly fantasy without significant re-use. I think SpaceX and Blue Origin are the only organisations on a path that could enable such a high launch frequency within, say, 10 years. Of course there has to be the demand too. Mega-constellations may provide that but too early to say if they will be successful.

How many times can a core be reused?

If it transpires that a core can be reused several times, then the capital cost is slashed, and that could allow what - a halving in price? The question is what does that do to market size?

Also, SpaceX will have to come up with an interesting cost and pricing framework:

Type                               | Expendable |  Re-usable
New core                        |                    |
Tried and tested core     |                     |
Tried and tested twice    |                    |
Tried and tested 3 times |                    |
Tried and tested 4 times |                    |
Tried and tested 5 times |                    |

If the overall reliability of all options is good, then SpaceX will have lower cost at better - or good enough - reliability than their competitors.

[HMXHMX]

Motorola and Teledesic together were looking at launch rates that were comparable in the 1997 time frame.  Been there, bid those, business never materialized.

Not comparable; we're talking thousands vs. hundreds--and those being launched-owned-operated by a single provider.  That single owner-operator (e.g. SpaceX) will determine whether their business case closes; if no, they won't; if yes, they will.

Given that both Motorola and Teledesic had real money, or access to capital markets, it is very comparable.  At the peak, we were preparing to bid on thousands of spacecraft launches.  It is not at all clear that most or even many of the proposed constellations will fly, and I can almost guarantee that if they do,  they will be significantly scaled back in number of spacecraft.

[gongora]

New article on this topic:

When Will Boeing and Lockheed Martin Lose This $1 Billion Government Subsidy?

The Air Force will award ULA one final ELC contract this year -- probably in September, as has been its past practice. But this will be the last such $1 billion subsidy ULA receives. Going forward, instead of dividing its spending between one contract for EELV and a second contract for launching rockets "under the requirements contract terms" of EELV, the Air Force will pay just one consolidated price per space launch -- one single "P-1 line" item.

https://www.fool.com/investing/2017/07/09/when-will-boeing-lockheed-martin-lose-1-billion-su.aspx
...

So, in the article it quotes a budget document saying the subsidy concludes at the end of FY2019.  Doesn't that mean they have TWO more contracts coming?

In general, it's hard for me to decide if a Motley Fool article ranks above or below toilet paper.  If you want accurate information on the space industry you should really just stop looking at that site.  They're just click-bait.

[Robotbeat]

Motorola and Teledesic together were looking at launch rates that were comparable in the 1997 time frame.  Been there, bid those, business never materialized.

Not comparable; we're talking thousands vs. hundreds--and those being launched-owned-operated by a single provider.  That single owner-operator (e.g. SpaceX) will determine whether their business case closes; if no, they won't; if yes, they will.

Given that both Motorola and Teledesic had real money, or access to capital markets, it is very comparable.  At the peak, we were preparing to bid on thousands of spacecraft launches.  It is not at all clear that most or even many of the proposed constellations will fly, and I can almost guarantee that if they do,  they will be significantly scaled back in number of spacecraft.

Cost of capital was higher in the 90s.