SpaceX to increase price of cargo delivery to space station by 50%

[Coastal Ron]

>
5. Investors don't invest in projects within companies, they invest in the company itself. The company may say they will use the funds for a particular use, but unless they have a contractual agreement that defines that, the investment could be used for anything the company wants to use it for.

StarLink may be different since Google is the patent assignee of the meshed constellation, and its inventor moved from Google to SpaceX shortly after the Google/Fidelity investment.

As I said there could be a contractual agreement, or Google just figures that their goals are aligned with SpaceX and they are just investing in SpaceX as a whole. That latter is the more typical situation, since the companies being invested in like maximum flexibility to respond to changing conditions.

[testguy]

SpaceX has already said it is going to fund BFR/S largely from profits generated from Falcon 9 & Heavy flights.  This is nothing new.

I think the $14 Billion dollar crew transport contract they won from NASA might also contribute a few bucks to the pot.

Depending on profit margins the SX flight schedule to date may have raised a $Bn in profit.

You're not going to build a whole new factory and build and flight test a vehicle the size of 2 A380's (and considerably heavier) with new engines, new construction methods and beyond anything this industry has seen in size for that kind of money. 

Issuing that contract to SX may have insured NASA's long term HSF future.

It is incorrect that BFR/BFS are to be funded from launch revenue of Falcon 9 and Heavy flights.

SpaceX has specifically stated that the Starlink constellation is the funding source of BFR/BFS and the Mars plans.  In fact, BFR/BFS is supposed to replace those vehicles -- at some appropriate point. 

BFR/BFS will likely contribute to it's own funding by lofting the constellation and doing other 'odd jobs' like delivering the Lunar Village and a bit of Mars exploration.

What year will Starlink begin to yield profits?  Yet BFR/S is currently in development.  Isn’t the funding of BFR/S now coming from ongoing operations including Falcon 9 missions and Cots.  Of coarse Starlink will provide major funding when the Mars project kicks into high gear.

[Robotbeat]

The line is murky. If a huge portion of Starlink is planned to be launched on BFR (which would be logical), then BFR development/building can be funded by an initial booking fee/prepayment/milestone payment by Starlink, just the same way that SpaceX received milestone payments from Falcon customers before that Falcon variant had launched.

This is one way that Starlink can help fund BFR before either are completed.

[su27k]

The company supposed to allow people to go to Mars for peanuts increasing their prices by 50pct? Pretty significant.

Yep. They're now charging ~$230m for a cargo and ~$400m for a crewed flight (excluding launch), BFR will cost several times that much, everything else is wishful thinking.

I said this before and I'll say it again: Even at $1B per flight to lunar surface with 20t payload, BFR would still be a huge bargain for NASA, considering in CRS-1 NASA is paying $1.6B for 20t to ISS.

[docmordrid]

Funny you should mention that: Commercial Lunar Payload Services

Link...

https://forum.nasaspaceflight.com/index.php?topic=45580.0

[AncientU]

SpaceX has already said it is going to fund BFR/S largely from profits generated from Falcon 9 & Heavy flights.  This is nothing new.

I think the $14 Billion dollar crew transport contract they won from NASA might also contribute a few bucks to the pot.

Depending on profit margins the SX flight schedule to date may have raised a $Bn in profit.

You're not going to build a whole new factory and build and flight test a vehicle the size of 2 A380's (and considerably heavier) with new engines, new construction methods and beyond anything this industry has seen in size for that kind of money. 

Issuing that contract to SX may have insured NASA's long term HSF future.

It is incorrect that BFR/BFS are to be funded from launch revenue of Falcon 9 and Heavy flights.

SpaceX has specifically stated that the Starlink constellation is the funding source of BFR/BFS and the Mars plans.  In fact, BFR/BFS is supposed to replace those vehicles -- at some appropriate point. 

BFR/BFS will likely contribute to it's own funding by lofting the constellation and doing other 'odd jobs' like delivering the Lunar Village and a bit of Mars exploration.

What year will Starlink begin to yield profits?  Yet BFR/S is currently in development.  Isn’t the funding of BFR/S now coming from ongoing operations including Falcon 9 missions and Cots.  Of coarse Starlink will provide major funding when the Mars project kicks into high gear.

You have a good point.  BFR/BFS early development is funded in part by ongoing operations.

Starlink should go active in 2021-2022 when 800 sats are on orbit.  Profit will be a ways down the road, since development costs will remain high as constellation is deployed, but revenue should jump immediately when they go live.  There may also be some advanced payments from DoD and others who are looking for some features and early access.

That said, $1.5B has been invested in SpaceX by Google, Fidelity, others(?) that can be used for BFR/BFS/satellite infrastructure development until revenue supplants those 'start-up funds'.  Existing launch services and cargo/crew contracts are paying the bills, too.  All of these funds are fungible, so some of each is being used for BFR/BFS early development

[DistantTemple]

"It is said" that investors are queuing up to invest in SX. Accepting investment now would still be at the recent $27B valuation, but once BFS has successfully hopped, or flown substantial sub-orbital.... a higher valuation can be argued... Then If SX can wait until BFS is orbital, hopefully with BFB tested! ... and maybe a couple of FH worth of Starlink sats up and demonstrating successful concept, then SX can accept investment based on a much higher valuation... and will not be giving away slices of the company for peanuts! With BFS in orbit, and looking good, and Starlink on track.... What would SX be worth $50B .... more? The hard thing is to try to cope without outside investment as long as possible. 

[philw1776]

The company supposed to allow people to go to Mars for peanuts increasing their prices by 50pct? Pretty significant.

Yep. They're now charging ~$230m for a cargo and ~$400m for a crewed flight (excluding launch), BFR will cost several times that much, everything else is wishful thinking.

I don't think that's accurate excluding launch. Launch (on a new booster every time) is part of the package, separate costs are not detailed anywhere that I know of.

Crew Dragon only has 2 flights per year. If BFR only flies twice per year, it will cost at least that much, but that rate is not sustainable - it will either fly much more (and lower cost per flight), or not at all.

Crew Dragon only has 1 flight per year, and it's more in the $200-230M range including launch if you look at the amount on the task orders for the flights.  The cost of passenger flights to Mars on BFR is unknown and irrelevant right now, that's far in the future.

The recurring price for crewed Dragon (including ops, excluding launch) is $308m, not $400m. My mistake. The source (page 10): https://ntrs.nasa.gov/archive/nasa/casi.ntrs.nasa.gov/20170008893.pdf

A testable prediction.
If BFR costs "several" times as much, excluding launch, then SpaceX will quickly go out of business at 3/4ths of a billion or more per shot testing BFR and using it to launch their Skynet constellation.
I really, really do not think Musk and Shotwell are that stupid.

Do we know for certain Starlink will be launched with BFR? Does it even have enough volume to launch 150t of smallsats?
[/b]

2nd answer first.  BFR does not need to launch 150t full payload capability.  It launches a full cargo bay of sats, whatever that up-mass is.  Unknown to the public at this time. It is a re-useable rocket such that the airframe, etc. is not expended and is re-fueled re-loaded with payload and used to launch the next cargo bay of satellites, often to different orbits.

We know nothing for certain to be literal, but SpaceX's public plan is to shut down F9 series production ASAP and to move to lower operating cost BFR ASAP.  A BFR according to SpaceX specifications should be a far more cost effective launcher, assuming it does not cost ~ a billion$ a launch as some claim.

[envy887]

Apples and oranges indeed. Dragon 2 is a small LEO capsule. BFR is a gigantic deep-space and Mars-return capable lifting body.

NASA's prices for Dragon 2, both crew and cargo versions, don't include reuse at all of any components, as far as I can tell. Certainly not gas-n-go reuse of the full stack.

Prices for all-new BFRs would certainly be higher. But I don't think SpaceX would even bother to bid it without reuse.

[speedevil]

Prices for all-new BFRs would certainly be higher. But I don't think SpaceX would even bother to bid it without reuse.

I note as an aside that during Elons talk at a SXSW this year, he mentioned BFS would be 300 tons if you expend everything.
Even $1B/300 tons to ISS $3000/kg would be enormously good value in the context of ISS.

Without counting the value in a 800m^3 possibly fully outfitted as lab passenger cabin going free in that mass, or any other services.

[DistantTemple]

Off Topic. But instead of building a space station, contracting a BFS long term, and fitting it out as station space (habitation, science, workshop etc) would be an excellent solution. And a great market. It can later be moved to other orbits, or leased again etc.

[john smith 19]

It is incorrect that BFR/BFS are to be funded from launch revenue of Falcon 9 and Heavy flights.

SpaceX has specifically stated that the Starlink constellation is the funding source of BFR/BFS and the Mars plans.  In fact, BFR/BFS is supposed to replace those vehicles -- at some appropriate point. 

BFR/BFS will likely contribute to it's own funding by lofting the constellation and doing other 'odd jobs' like delivering the Lunar Village and a bit of Mars exploration.

This chronology makes no sense.

BFR is being designed and built now.

Starlink has not launched a single operational satellite and I'm not sure there is a date when it will do so.

OTOH NASA has awarded the $14Bn COTS II contract.

What sounds more likely to you?

You've said yourself Starlink won't be making money till at least 2022.

[RedLineTrain]

google/etc didn't invest in the cargo delivery portion of SpaceX, anyway. They invested in Starlink.

This is oft-repeated, but as far as we know, it is not so.  Shotwell stated that the Google investment was for "general corporate purposes." That is a very specific term of art meaning that the money is not earmarked for any particular thing.

[AncientU]

It is incorrect that BFR/BFS are to be funded from launch revenue of Falcon 9 and Heavy flights.

SpaceX has specifically stated that the Starlink constellation is the funding source of BFR/BFS and the Mars plans.  In fact, BFR/BFS is supposed to replace those vehicles -- at some appropriate point. 

BFR/BFS will likely contribute to it's own funding by lofting the constellation and doing other 'odd jobs' like delivering the Lunar Village and a bit of Mars exploration.

This chronology makes no sense.

BFR is being designed and built now.

Starlink has not launched a single operational satellite and I'm not sure there is a date when it will do so.

OTOH NASA has awarded the $14Bn COTS II contract.

What sounds more likely to you?

You've said yourself Starlink won't be making money till at least 2022.

Not sure which part of the chronology doesn't work for you.
Here are some details behind my timeline.

Lifting the constellation is in a few phases:
1. get first 800 sats to orbit so Starlink can go active (2019 to 2021-2022)
2. get next 800 launched to complete phase 1 per FCC application
3. launch at least 2,213 by 2024 per FCC license
4. launch remaining 2,212 by 2027 per FCC license
5. launch about 8,000 VLEO sats somewhere along the line per FCC application
6. launch replacement satellites for those reaching EOL at 5-7 years (starts in 2024 or so) per FCC application
7. Steady-state condition will require launching 2,000 sats per year forever to maintain a 12,000 sat constellation with nominal 6 year life.

BFR/BFS development will mostly be in parallel with #1.

BFR/BFS operational phase, and the building of a substantial number of vehicles, launch facilities, Mars hardware, etc. will start around #2, primarily using cash flow from constellation.  This is where the real money is needed.

BFR/BFS can and will contribute to launching the constellation... #3-#7, and might contribute partially to #2.

BTW, launch revenue is of order one billion dollars per year; the constellation is $10-15B to launch, and $30B revenue per year after something like five years; Mars plans are several tens of billions over decades.  Falcon 9 and Heavy revenue is a pittance relative to these plans.

[Dave G]

SpaceX has specifically stated that the Starlink constellation is the funding source of BFR/BFS and the Mars plans.  In fact, BFR/BFS is supposed to replace those vehicles -- at some appropriate point. 

When did SpaceX say this?  Was it before or after IAC-2017?

At IAC-2017, Musk said:

So then getting back to the question of how do we pay for this system, this is really quite a profound — I won't call it breakthrough, but realization that if we can build a system that cannibalizes our own products, makes our own products redundant, then all of the resources, which are quite enormous, that are used for Falcon 9, Heavy, and Dragon, can be applied to one system.

Some of our customers are conservative and they want to see BFR fly several times before they're comfortable launching in it, so what we plan to do is to build ahead, and have a stock of Falcon 9 and Dragon vehicles, so that customers can be comfortable if they want to use the old rocket, the old spacecraft, they can do that, we'll have a bunch in stock. But then all of our resources will then turn towards building BFR. And we believe that we can do this with the revenue we receive for launching satellites and for servicing the space station.

From Elon's quote above, I notice 2 things:
1) The phrasing seems to indicate a change from their previous thinking.
2) He no longer mentions operating satellites as a BFR funding source, only launching them.

Also, in order to have 2 BFS cargo Mars missions in 2022, that means 12 BFR launches (2 BFS cargo + 10 BFS tanker launches) all relatively close together around August 2022.  To have a good shot at that, SpaceX would need the first full-up BFR/BFS test launch about a year earlier, i.e. around August 2021.

Since most of the BFR development cost will occur before the first full-up BFR/BFS test launch, I don't see how SpaceX could fund BFR using the revenue they get from operating Starlink satellites.

[testguy]

SpaceX has specifically stated that the Starlink constellation is the funding source of BFR/BFS and the Mars plans.  In fact, BFR/BFS is supposed to replace those vehicles -- at some appropriate point. 

When did SpaceX say this?  Was it before or after IAC-2017?

At IAC-2017, Musk said:

So then getting back to the question of how do we pay for this system, this is really quite a profound — I won't call it breakthrough, but realization that if we can build a system that cannibalizes our own products, makes our own products redundant, then all of the resources, which are quite enormous, that are used for Falcon 9, Heavy, and Dragon, can be applied to one system.

Some of our customers are conservative and they want to see BFR fly several times before they're comfortable launching in it, so what we plan to do is to build ahead, and have a stock of Falcon 9 and Dragon vehicles, so that customers can be comfortable if they want to use the old rocket, the old spacecraft, they can do that, we'll have a bunch in stock. But then all of our resources will then turn towards building BFR. And we believe that we can do this with the revenue we receive for launching satellites and for servicing the space station.

From Elon's quote above, I notice 2 things:
1) The phrasing seems to indicate a change from their previous thinking.
2) He no longer mentions operating satellites as a BFR funding source, only launching them.

Also, in order to have 2 BFS cargo Mars missions in 2022, that means 12 BFR launches (2 BFS cargo + 10 BFS tanker launches) all relatively close together around August 2022.  To have a good shot at that, SpaceX would need the first full-up BFR/BFS test launch about a year earlier, i.e. around August 2021.

Since most of the BFR development cost will occur before the first full-up BFR/BFS test launch, I don't see how SpaceX could fund BFR using the revenue they get from operating Starlink satellites.

I agree with your point of view.  I stated the same upthread.  However, it was stated up thread that BFR/S could recieve prepayments for launch services from the infusion of Capital funds raised for the development and initial deployment of Starlink.  There are lots of tricks in the bean counters bag.  Prepayments for launch services would not be a surprise.

[Robotbeat]

SpaceX has specifically stated that the Starlink constellation is the funding source of BFR/BFS and the Mars plans.  In fact, BFR/BFS is supposed to replace those vehicles -- at some appropriate point. 

When did SpaceX say this?  Was it before or after IAC-2017?

Before, during that private Seattle event (in (2015?) that was surreptitiously recorded.

At IAC-2017, Musk said:

So then getting back to the question of how do we pay for this system, this is really quite a profound — I won't call it breakthrough, but realization that if we can build a system that cannibalizes our own products, makes our own products redundant, then all of the resources, which are quite enormous, that are used for Falcon 9, Heavy, and Dragon, can be applied to one system.

Some of our customers are conservative and they want to see BFR fly several times before they're comfortable launching in it, so what we plan to do is to build ahead, and have a stock of Falcon 9 and Dragon vehicles, so that customers can be comfortable if they want to use the old rocket, the old spacecraft, they can do that, we'll have a bunch in stock. But then all of our resources will then turn towards building BFR. And we believe that we can do this with the revenue we receive for launching satellites and for servicing the space station.

From Elon's quote above, I notice 2 things:
1) The phrasing seems to indicate a change from their previous thinking.
2) He no longer mentions operating satellites as a BFR funding source, only launching them.

Also, in order to have 2 BFS cargo Mars missions in 2022, that means 12 BFR launches (2 BFS cargo + 10 BFS tanker launches) all relatively close together around August 2022.  To have a good shot at that, SpaceX would need the first full-up BFR/BFS test launch about a year earlier, i.e. around August 2021.

Since most of the BFR development cost will occur before the first full-up BFR/BFS test launch, I don't see how SpaceX could fund BFR using the revenue they get from operating Starlink satellites.

His only mention of using Starlink for funding of Mars, I believe, was a private one. He has never said that publicly. So a public statement which doesn't mention Starlink specifically as a funding source doesn't contradict what was earlier said privately.

The funding set aside for Starlink can help pay for BFR's development in the same way that early customers that signed on to Falcon helped pay for Falcon 9 development well before they launched on Falcon 9. The only difference is that Starlink is more like an internal "customer."

But even once BFR is operational as a satellite launcher, there's a whole bunch of development still to be done: docking/refueling, pressurized interior, long-duration capability with appropriate thermal management, crew cabin requirements including some modifications to help with abort scenarios (basically, think of all the stuff needed to make the COTS Demo flight 1 Dragon into crewed Dragon 2... although I'm not suggesting a full launch abort capability like Dragon 2 has). Surface infrastructure development (most importantly water extraction, solar power generation, and the ISRU plant and storage), as well.

However, I agree F9/FH sorta kinda will also help with BFR development, at least from a cashflow perspective.

[RotoSequence]

Since most of the BFR development cost will occur before the first full-up BFR/BFS test launch, I don't see how SpaceX could fund BFR using the revenue they get from operating Starlink satellites.

Which could mean they'll be paying for it with venture capital funding, that's being raised through the revenue potential of Starlink satellites.

[joek]

Since most of the BFR development cost will occur before the first full-up BFR/BFS test launch, I don't see how SpaceX could fund BFR using the revenue they get from operating Starlink satellites.

Which could mean they'll be paying for it with venture capital funding, that's being raised through the revenue potential of Starlink satellites.

Or debt; expect Musk can draw several $B of debt financing if desired/needed.  That said, we're getting OT; Starlink, BFR and their financing belong in other threads

[joek]

...
I believe the overlooked issue with the CRS pricing increase is: what might the actual BFR "public" pricing really be in light of the ~$7m/flight claim that was made upon unveiling the current BFR?  For example, we might consider early SpaceX announcements of pricing for the initial F9 ($18m, circa 2005) with the current reality.
...

So double or quadruple it to $14-28M/flight.  Even at 10x $70M/flight would still be a significant change to the status quo, yes?