Author Topic: Reusability effect on costs  (Read 184324 times)

Offline Jcc

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Re: Reusability effect on costs
« Reply #320 on: 05/05/2017 01:23 AM »
I don't understand this $1B figure. Isn't most of this simply the cost of developing the Merlin engine and the F9 system, through its various iterations? The incremental cost of developing reusability, given the initial version of the F9, does not seem anything like a billion dollars to me. The flight tests were essentially free, since they were added to commercial and government flights paid for by commercial and government customers, and the extra hardware needed was minimal. The grid fins and upgraded 'non-sticky' servos, as far as I know. The rest was already designed and built for the expendable version of F9. Add the cost of Grasshopper, the 'drone ships', landing zones, etc., and it still does not seem close to a billion dollars.

Maybe he gave an inflated price to scare away competitors.

Offline kaiser

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Re: Reusability effect on costs
« Reply #321 on: 05/05/2017 04:10 AM »
There's  lots of other costs, including opportunity costs.
Hmm. Has reuse really slowed their launch cadence ramp-up? Or were you thinking they'd be further ahead with some other project? Not Dragon 2 - that's been paced by NASA's budget. Falcon Heavy, perhaps? except that's actually being helped towards an affordable demonstration flight by reuse. So I don't know what opportunities you mean, specifically.

Keep in mind the added cost of LOM's/RTF's brought on by the reuse agenda
Citation required. I see no evidence that Falcon 9's failures were a product of the drive for resuability. Their startup launch failure rate has not been at a level that would suggest that the attempt to re-use has played into more failures than expected. As I mentioned above, recovery of intact stages is more likely to play in to better reliability and fewer future failures.

as well as failed landings.
What, the cost of the legs? the damage to the ASDS? - peanuts. Certainly you can't possibly mean the cost of the rocket bodies, since in the expendable scenario, they would be lost anyway.

Not the damage to the ASDS, the actual ASDS.  Just the cost of designing, procuring, modifying, licensing, testing, and operating both of those ships during the reuse testing phase is in the mid to high double digit millions.

Offline JamesH65

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Re: Reusability effect on costs
« Reply #322 on: 05/05/2017 11:27 AM »
There's  lots of other costs, including opportunity costs.
Hmm. Has reuse really slowed their launch cadence ramp-up? Or were you thinking they'd be further ahead with some other project? Not Dragon 2 - that's been paced by NASA's budget. Falcon Heavy, perhaps? except that's actually being helped towards an affordable demonstration flight by reuse. So I don't know what opportunities you mean, specifically.

Keep in mind the added cost of LOM's/RTF's brought on by the reuse agenda
Citation required. I see no evidence that Falcon 9's failures were a product of the drive for resuability. Their startup launch failure rate has not been at a level that would suggest that the attempt to re-use has played into more failures than expected. As I mentioned above, recovery of intact stages is more likely to play in to better reliability and fewer future failures.

as well as failed landings.
What, the cost of the legs? the damage to the ASDS? - peanuts. Certainly you can't possibly mean the cost of the rocket bodies, since in the expendable scenario, they would be lost anyway.

Not the damage to the ASDS, the actual ASDS.  Just the cost of designing, procuring, modifying, licensing, testing, and operating both of those ships during the reuse testing phase is in the mid to high double digit millions.

Which is still a small proportion of $1B.

Online envy887

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Re: Reusability effect on costs
« Reply #323 on: 05/05/2017 03:12 PM »
There's  lots of other costs, including opportunity costs.
Hmm. Has reuse really slowed their launch cadence ramp-up? Or were you thinking they'd be further ahead with some other project? Not Dragon 2 - that's been paced by NASA's budget. Falcon Heavy, perhaps? except that's actually being helped towards an affordable demonstration flight by reuse. So I don't know what opportunities you mean, specifically.

Keep in mind the added cost of LOM's/RTF's brought on by the reuse agenda
Citation required. I see no evidence that Falcon 9's failures were a product of the drive for resuability. Their startup launch failure rate has not been at a level that would suggest that the attempt to re-use has played into more failures than expected. As I mentioned above, recovery of intact stages is more likely to play in to better reliability and fewer future failures.

as well as failed landings.
What, the cost of the legs? the damage to the ASDS? - peanuts. Certainly you can't possibly mean the cost of the rocket bodies, since in the expendable scenario, they would be lost anyway.

Not the damage to the ASDS, the actual ASDS.  Just the cost of designing, procuring, modifying, licensing, testing, and operating both of those ships during the reuse testing phase is in the mid to high double digit millions.

Which is still a small proportion of $1B.

~5% or so.

Online rsdavis9

Re: Reusability effect on costs
« Reply #324 on: 05/05/2017 03:23 PM »

Citation required. I see no evidence that Falcon 9's failures were a product of the drive for resuability. Their startup launch failure rate has not been at a level that would suggest that the attempt to re-use has played into more failures than expected. As I mentioned above, recovery of intact stages is more likely to play in to better reliability and fewer future failures.


How about they went to chilled LOX because they needed extra performance for reusability.
The question is:
would they have pushed for greater margins if they didn't want reusability?
With ELV best efficiency was the paradigm. The new paradigm is reusable, good enough, and commonality of design.
Same engines. Design once. Same vehicle. Design once. Reusable. Build once.

Online envy887

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Re: Reusability effect on costs
« Reply #325 on: 05/05/2017 06:14 PM »

Citation required. I see no evidence that Falcon 9's failures were a product of the drive for resuability. Their startup launch failure rate has not been at a level that would suggest that the attempt to re-use has played into more failures than expected. As I mentioned above, recovery of intact stages is more likely to play in to better reliability and fewer future failures.


How about they went to chilled LOX because they needed extra performance for reusability.
The question is:
would they have pushed for greater margins if they didn't want reusability?

Maybe they needed extra performance to compete with Ariane and Proton?

Eventually, ELVs would have bumped hard into SpaceX's greater goals. They don't exist to make a quick buck. They exist to move humanity out into the solar system. How do you measure the opportunity cost of never being able to achieve your overarching goal?

ELVs might make more sense for ULA. They absolutely don't for SpaceX to Blue Origin.

Offline Joffan

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Re: Reusability effect on costs
« Reply #326 on: 05/05/2017 07:10 PM »

as well as failed landings.
What, the cost of the legs? the damage to the ASDS? - peanuts. Certainly you can't possibly mean the cost of the rocket bodies, since in the expendable scenario, they would be lost anyway.

Not the damage to the ASDS, the actual ASDS.  Just the cost of designing, procuring, modifying, licensing, testing, and operating both of those ships during the reuse testing phase is in the mid to high double digit millions.
Failed landings don't add the acquisition of the ASDS as an extra cost. The reusability program requires ASDS.
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Offline Space Ghost 1962

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Re: Reusability effect on costs
« Reply #327 on: 05/06/2017 01:33 AM »
A lot of nonsense posts here. Will try one more time. With small words.

Anything that deals with the path to reuse, including propulsion enhancement (to cover losses), is part of that $1B.

In theory, anything post F9 1.0. That I as an accountant/CFO can categorize as such.

And we are talking GAAP (Generally Accepted Accounting Practice) rules here, not whatever nonsense rules you think up on your own.

It's nothing even up for debate.

But then there are people who debate physics, law, ... and think of them as if they are a form of ideology/politics/rhetoric. They're not.


Offline oldAtlas_Eguy

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Re: Reusability effect on costs
« Reply #328 on: 05/06/2017 03:06 AM »
A lot of nonsense posts here. Will try one more time. With small words.

Anything that deals with the path to reuse, including propulsion enhancement (to cover losses), is part of that $1B.

In theory, anything post F9 1.0. That I as an accountant/CFO can categorize as such.

And we are talking GAAP (Generally Accepted Accounting Practice) rules here, not whatever nonsense rules you think up on your own.

It's nothing even up for debate.

But then there are people who debate physics, law, ... and think of them as if they are a form of ideology/politics/rhetoric. They're not.
Meaning the M1D and all its updates is part of those costs. Also included is the stage stretches, simulations, modeling software development, etc. That $1B represents a lot of work over more than 7 years.

As an equivalent in manyears that $1B equals 5,000 manyears of work. Which implies a large portion of the manpower of SpaceX has been charging toward this work since 2010. That manpower will after this start work on the ITS in ever increasing amounts. Such that that recovery and profit from launch totaling an almost $20M / launch will go toward paying the continuation of the R&D work of future LVs. Estimate is that this is a value of up to $0.5B per year or enough to fund the work of as many as 2000 persons per year doing R&D.

This sizes the SpaceX R&D teams as a significant portion of all of SpaceX's manpower (~1/3).

As SpaceX's manpower scales up for its operations this will also enable the scaling up of that significant portion of R&D staff. Such that 1 out of every 3 or 4 hires is for R&D work vs production/operations.

This is a very aggressive expansionist culture. It is also a self fulfilling cycle of lowering costs to be able to lower costs in the near future even more "rinse and repeat".

Online FutureSpaceTourist

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Re: Reusability effect on costs
« Reply #329 on: 05/06/2017 08:34 AM »
Anything that deals with the path to reuse, including propulsion enhancement (to cover losses), is part of that $1B.

In theory, anything post F9 1.0.

The problem is that there's no way for us to know what proportion of the cost of changes made (such as Merlin upgrades) were for re-use. Even as an ELV it's clear SpaceX would have upgraded to increase payload and thus the amount of the market F9 could serve.

$1B was Elon's off-the-cuff estimate of re-use cost but no way to know how accurate it is. So I think all we can take from this is that re-use development costs were substantial (at least 100s of millions, maybe well over a billion).

Offline Space Ghost 1962

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Re: Reusability effect on costs
« Reply #330 on: 05/06/2017 06:19 PM »
Meaning the M1D and all its updates is part of those costs. Also included is the stage stretches, simulations, modeling software development, etc. That $1B represents a lot of work over more than 7 years.
Falcon 9 1.0 /M1C was a perfectly usable  Delta-II class vehicle with a significant manifest.

They would have been a successful provider, quite healthy financially, and likely focussed on gradual F9US capabilities/performance, then gradually phased in booster/M1C improvements much more gradually.

Quote
As an equivalent in manyears that $1B equals 5,000 manyears of work. Which implies a large portion of the manpower of SpaceX has been charging toward this work since 2010. That manpower will after this start work on the ITS in ever increasing amounts. Such that that recovery and profit from launch totaling an almost $20M / launch will go toward paying the continuation of the R&D work of future LVs. Estimate is that this is a value of up to $0.5B per year or enough to fund the work of as many as 2000 persons per year doing R&D.
Agree, but I'd say since 2009.

Quote
This sizes the SpaceX R&D teams as a significant portion of all of SpaceX's manpower (~1/3).

As SpaceX's manpower scales up for its operations this will also enable the scaling up of that significant portion of R&D staff. Such that 1 out of every 3 or 4 hires is for R&D work vs production/operations.

This is a very aggressive expansionist culture. It is also a self fulfilling cycle of lowering costs to be able to lower costs in the near future even more "rinse and repeat".
Musk would likely agree with this.

There was no business need to aggressively compete for either reuse or max/exceed ULA/Airbus-Safran.

Indeed, there was extremely good reasons to take F9 1.0 and make it a as reliable as Atlas V, with a more active manifest, and get the then Falcon 9H onto SLC-4E, as an alternative to DIVH.

Anything that deals with the path to reuse, including propulsion enhancement (to cover losses), is part of that $1B.

In theory, anything post F9 1.0.

The problem is that there's no way for us to know what proportion of the cost of changes made (such as Merlin upgrades) were for re-use. Even as an ELV it's clear SpaceX would have upgraded to increase payload and thus the amount of the market F9 could serve.
Yes there is. SX's original story. It would have covered the same market. Just done so in a different way.

(Keep in mind that anything that ULA does going forward, faces the same situation. If Vulcan/BE4, Vulcan/AR1, Atlas VI/AR1 ... they'll start out with lesser performance/higher cost, and converge on the market as is.)

Quote
$1B was Elon's off-the-cuff estimate of re-use cost but no way to know how accurate it is. So I think all we can take from this is that re-use development costs were substantial (at least 100s of millions, maybe well over a billion).

More like $2B. Because there are other "reuse investments" yet to make the mark, that have been invested in all along, just not fielded.

He is underplaying his hand. Which turns out to be wise at the moment.

My guess is that by doing so, with rivals in slow pursuit, the gradual, growing effect of global market launch prices declining, frequency increasing ... SX wins by not losing. "Trash talking" just looks like bitterness of outdistanced rivals.

Offline macpacheco

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Re: Reusability effect on costs
« Reply #331 on: 05/06/2017 06:33 PM »
I don't understand this $1B figure. Isn't most of this simply the cost of developing the Merlin engine and the F9 system, through its various iterations? The incremental cost of developing reusability, given the initial version of the F9, does not seem anything like a billion dollars to me. The flight tests were essentially free, since they were added to commercial and government flights paid for by commercial and government customers, and the extra hardware needed was minimal. The grid fins and upgraded 'non-sticky' servos, as far as I know. The rest was already designed and built for the expendable version of F9. Add the cost of Grasshopper, the 'drone ships', landing zones, etc., and it still does not seem close to a billion dollars.

Maybe he gave an inflated price to scare away competitors.
Saying US$ 1 billion is deliberately inaccurate. The real number is neither half a billion nor 1.5 billion. Probably within 20%.
The most important effect of an imprecise number is to prevent competitors from accurately comparing their estimates with what SpaceX actually spent.
Its likely SpaceX spent less than US$ 1.5 billion in all F9 related R&D including Merlin, recovery, plus the ancillary costs like ASDS.

The math competitors should be doing right now is either follow SpaceX or go out of business for sure in 10 years.
The real scary scenario is by the time the competitor has booster reuse going on, SpaceX likely already has the whole stack reusable with total recovery+refurb costs under 10% of building a new booster+upper stage+fairing and with launch capability limited only by available pad capacity.
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Offline Space Ghost 1962

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Re: Reusability effect on costs
« Reply #332 on: 05/06/2017 07:44 PM »
Maybe he gave an inflated price to scare away competitors.
Saying US$ 1 billion is deliberately inaccurate. The real number is neither half a billion nor 1.5 billion. Probably within 20%.
The most important effect of an imprecise number is to prevent competitors from accurately comparing their estimates with what SpaceX actually spent.
Agree its hard to assess threat and scope/budget/schedule/program response.

This is a market that is used to multi-decade LV operation, so the gross competitive landscape doesn't change much.

What do you "target"? Believe that played a role in the Vulcan/ Ariane 6 decisions - they honestly didn't have any comfort in doing anything but the obvious. And, it's not gotten any clearer, as we're fast approaching a "Max-Q" of sorts with the potential for high return on reuse (24 hr, US, fairing, capsule, ...). It's not like Shuttle.

Quote
The math competitors should be doing right now is either follow SpaceX or go out of business for sure in 10 years.
They can also change business models.

Quote
The real scary scenario is by the time the competitor has booster reuse going on, SpaceX likely already has the whole stack reusable with total recovery+refurb costs under 10% of building a new booster+upper stage+fairing and with launch capability limited only by available pad capacity.
Even with all of these they'd still have launches. SX does not do everything, is not a "magic bullet".

What they'd do is steal the long term future, with limited cost recovery.

Think of it as top of the pyramid, with the bottom constantly eroding.

Offline Coastal Ron

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Re: Reusability effect on costs
« Reply #333 on: 05/06/2017 08:15 PM »
The math competitors should be doing right now is either follow SpaceX or go out of business for sure in 10 years.

Launch customers don't want a monopoly for launch services, no matter how benign it supposedly may be.  Which means they will continue to spread around their business to a number of launch providers.

However, out of the worldwide selection of commercial launch providers, SpaceX is poised to be a low cost provider, as is Blue Origin.  ESA will likely get a steady stream of business due to it's European ownership, and ULA will likely be able to depend on a minimum amount of launch business from the U.S. Government.

But if you are a launch provider and you can't justify being either a primary or backup launch provider for a particular market segment, then your future won't look too bright.

Quote
The real scary scenario is by the time the competitor has booster reuse going on, SpaceX likely already has the whole stack reusable with total recovery+refurb costs under 10% of building a new booster+upper stage+fairing and with launch capability limited only by available pad capacity.

Blue Origin is helping to validate the reusable launch market, but it is far from proven yet.  But we do want more launch providers to follow.  So SpaceX and Blue Origin providing some market "pain" is good, because without it we won't have a complete changeover to a reusable launch future.

Which is why I'm honestly concerned about ULA, since they are at a point where they can either be the next launch provider to announce they are pursuing 1st stage reusability, or they will be vying to be one of the last to build an expendable launch system.
If we don't continuously lower the cost to access space, how are we ever going to afford to expand humanity out into space?

Online docmordrid

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Re: Reusability effect on costs
« Reply #334 on: 05/06/2017 08:22 PM »
.>
Which is why I'm honestly concerned about ULA, since they are at a point where they can either be the next launch provider to announce they are pursuing 1st stage reusability, or they will be vying to be one of the last to build an expendable launch system.

Or, they could do what seems to me the bloody obvious; rebranding. Buy reusable New Glenn boosters from Blue Origin, put a Centaur or ACES on top and apply a big "VULCAN" sticker to  the side.
« Last Edit: 05/06/2017 08:25 PM by docmordrid »
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Offline oldAtlas_Eguy

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Re: Reusability effect on costs
« Reply #335 on: 05/06/2017 08:57 PM »
Another conclusion is that If SpaceX can actually work out the recovery reuse of an US then the FH (1st Stage +US+Faring) fully reusable woulkd have an internal SpaceX cost at very close to the same as an F9 (1st Stage +Faring) partial reusable. This internal cost value would be ~$30M.

But the real kicker is the payload capability difference FH-FR payload to LEO -> 20mt and the F9-PR payload to LEO ->16mt. Also you do not have to manufacture a new US for each flight. This increases the capability to fly more often.

If both are priced the same at $50M ($20M in profit for recovery of past development spending and future R&D work) the $/kg measure of the vehicles would be FH-FR $2,500/kg and the F9-PR $3,125/kg.

If then they are able to recover an US from GTO they then have a complete replacement and fully reusable stack for 90% of all of their manifested payloads. Suddenly the bottleneck of manufacture of an US for each flight goes away enabling the possibility of flying 1 a week from each operational pad 200+ launches a year. The manufacturing facility would still be going full tilt producing 20 US (10 uses) and 20 1st stages (30 uses because less stress and there are three boosters use per every 1 US use) a year.

Now with 200  launches per year and reducing the price to only a $5M margin ->$35M/launch the profit is still very large  at $1B/yr.

Also at these rates the other costs may also reduce enabling the costs to go down another $5M to $10M to $20 or $25M making the price as low as $25M/launch with SpaceX still making a $5M profit.

Suddenly the tourist business case of 6 tourists on a reused D2 where the total price of launching 6 tourist to LEO is $40M. Less than $7M per seat.

This is if SpaceX does not develop any other game changing LV technology vehicle. A probably price for an ITS that delivers 200 tourists to LEO at $60M/launch is $300,000/person. Practically the same price as the current suborbital price/person. A factor of 20 reduction in per seat price over that of the fully reusable FH+D2.


Offline speedevil

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Re: Reusability effect on costs
« Reply #336 on: 05/06/2017 09:26 PM »
Launch customers don't want a monopoly for launch services, no matter how benign it supposedly may be.  Which means they will continue to spread around their business to a number of launch providers.

To go off at a tangent (through still circling around the original thread title.).

Launch vehicle reliability is accepted to be of the order of a percent.

One of the reasons a monopoly is bad is that you can be left facing a several month shutdown on accident.

Might at some point it get to the point that 'yes, a stage exploded, but this vehicle has worked just fine 20 times', and not have a shutdown?

That is - you can have confidence that launch reliability is around the same, even with a stage being lost.

(It's in principle possible it gets to where passenger plane level reliability is expected, where this question may have an obvious 'no' answer, but that seems unlikely in the near future.

Offline macpacheco

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Re: Reusability effect on costs
« Reply #337 on: 05/07/2017 07:58 AM »
If Ariane looses 2/3 of its launch volume can it still be a viable business ? Would the EU be interested in substantially increasing its subsidy to keep it afloat ?

As it stands, ULA is also at risk of going under, even with its US$ 1 billion / yr assured income. If SpaceX starts servicing more US Government launches than ULA and Blue Origin starts competing for those (that can be launched from FL), the whole rationale for the US$ 1 billion/yr payouts crumble.

Of those two, I think ULA is at much higher risk, since they already do very little commercial launches.
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Offline M.E.T.

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Re: Reusability effect on costs
« Reply #338 on: 05/07/2017 09:24 AM »
Another conclusion is that If SpaceX can actually work out the recovery reuse of an US then the FH (1st Stage +US+Faring) fully reusable woulkd have an internal SpaceX cost at very close to the same as an F9 (1st Stage +Faring) partial reusable. This internal cost value would be ~$30M.

But the real kicker is the payload capability difference FH-FR payload to LEO -> 20mt and the F9-PR payload to LEO ->16mt. Also you do not have to manufacture a new US for each flight. This increases the capability to fly more often.

If both are priced the same at $50M ($20M in profit for recovery of past development spending and future R&D work) the $/kg measure of the vehicles would be FH-FR $2,500/kg and the F9-PR $3,125/kg.

If then they are able to recover an US from GTO they then have a complete replacement and fully reusable stack for 90% of all of their manifested payloads. Suddenly the bottleneck of manufacture of an US for each flight goes away enabling the possibility of flying 1 a week from each operational pad 200+ launches a year. The manufacturing facility would still be going full tilt producing 20 US (10 uses) and 20 1st stages (30 uses because less stress and there are three boosters use per every 1 US use) a year.

Now with 200  launches per year and reducing the price to only a $5M margin ->$35M/launch the profit is still very large  at $1B/yr.

Also at these rates the other costs may also reduce enabling the costs to go down another $5M to $10M to $20 or $25M making the price as low as $25M/launch with SpaceX still making a $5M profit.

Suddenly the tourist business case of 6 tourists on a reused D2 where the total price of launching 6 tourist to LEO is $40M. Less than $7M per seat.

This is if SpaceX does not develop any other game changing LV technology vehicle. A probably price for an ITS that delivers 200 tourists to LEO at $60M/launch is $300,000/person. Practically the same price as the current suborbital price/person. A factor of 20 reduction in per seat price over that of the fully reusable FH+D2.

I want to understand the $30m price tag you estimated for a fully reusable FH. How is that calculated? It seems somewhat high to me, considering that Elon's goal is a price reduction of an order of magnitude or maybe even two orders of magnitude with full reusability.


By my count, to construct a FH rocket costs say $60m for the centre core, upper stage and fairing, and say another $80m for the two side boosters. So let's call that $140m. Spread that over 10 missions with only minimal refurbishment (say $1m refurbishment per mission) and you get to $150m for 10 missions.

That's $15m per launch. Add fuel, ground control costs and other peripheral launch costs and you maybe get to $20m per launch.

But that's if you spread the cost over just 10 launches.

According to Elon, Block 5 will require more extensive refurbishment after 10 launches. If you calculate the lifespan of a booster as 100 launches, with say $10m refurbishment per booster after 10 launches, that's an additional $270m refurbishment costs over the 100 launch lifespan of the 3 FH boosters. This needs to be added to the $140m initial construction cost, which gets you to just over $400m for the 100 launches.

Add the $5m fuel and peripheral launch costs per mission, and $1m minimal refurbishment cost for 90 of the 100 launches (the ones that don't get the major refurbishment) and you get to a rough estimate of around $1bn for 100 Falcon Heavy launches. That works out to around $10m per Falcon Heavy launch.

Maybe I missed some costs, but I suspect I actually erred in the other direction, with very high refurbishment costs per booster every 10 launches. That may actually be lower than I estimated.

Anyway, by my guestimate, with full reusability, we are looking at $20m per Falcon Heavy launch if it lasts 10 launches, and $10m or less if it lasts for 100 launches.

« Last Edit: 05/07/2017 09:25 AM by M.E.T. »

Online docmordrid

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Re: Reusability effect on costs
« Reply #339 on: 05/07/2017 09:54 AM »
>
I want to understand the $30m price tag you estimated for a fully reusable FH. How is that calculated? It seems somewhat high to me, considering that Elon's goal is a price reduction of an order of magnitude or maybe even two orders of magnitude with full reusability.

By my count, to construct a FH rocket costs say $60m for the centre core, upper stage and fairing, and say another $80m for the two side boosters. So let's call that $140m.
>

Except that they'll be making extensive use of flight proven  stages for the FH side boosters, throwing your numbers way off.  The FH maiden flight will use them.
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