How does SpaceX make money?

we've seen SpaceX achieve incredible things and make huge progress towards space explosion in the last few years it's gone from launching small rockets in the orbit just to be destroyed upon landing to launching the most powerful rocket in the world and successfully landing it Elon Musk and his team even have ambitions to eventually leave our home planet and colonize Mars but have you ever wondered how SpaceX is able to get money out of all this founded in 2002 SpaceX has since accomplished things such as being the first privately funded company to launch orbit and recover spacecraft the first to launch a previously used rocket and more recently Spacek says launched and successfully landed the world's most powerful rocket the Falcon heavy but SpaceX had to endure a lot of failure before their success costing hundreds of millions of dollars and even their successful launches still cost tens of millions from an outsider's view the market for launching things into space seems pretty small so how does SpaceX afford so many launches and how does it make money in short SpaceX makes its money from launching satellites in orbit in delivering cargo to the international space station SpaceX currently has contracts or three major types of customers commercial telecommunication companies NASA and the US military they all have different needs but space sixes able to serve all of them in the price varies depending on the complexity of the launch SpaceX uses the Dragon spacecraft as well as two types of rockets called the Falcon 9 and the Falcon Heavy to complete these missions the Dragon capsule can be launched into space by one of these rockets to deliver cargo to the ISS in the video I'm mostly talking about the rockets since the dragon isn't used for every mission but I will discuss how they plan on using it for human travel in the future if you wanted to launch a satellite into space or deliver some cargo somewhere at the base rate for a Falcon 9 launch is 62 million dollars and can increase by up to 20 extra million dollars depending on how complicated the mission is the base rate for the Falcon Heavy is 90 million dollars and as a recording this it has only launched one time combined these two rockets have a total of 50 successful launches and only two failures since 2010 landing these Rockets is the hard part at this point but the success rates are quickly improving and the company is very close to perfecting the system in 2017 alone Spacek skom pleated 18 mission and so far in 2018 it has already completed four missions including the first ever Falcon Heavy mission the majority of these launches being for communication satellites for the commercial market including customers such as SES orb comm Thai comm Asia Sat and many others the Falcon 9 was designed to transport satellites but it's also used to transport cargo to the ISS it can carry payloads to low-earth orbit where the ISS and most satellites are located of up to 23 metric tons or 50,000 pounds the Falcon Heavy on the other hand can carry nearly triple that as 64 metric tons or 140,000 pounds in SpaceX has plans to build an even bigger rocket in the near future called the bfr which should be able to carry over double the Falcon heavies capacity to dive deeper into the cost of these rockets we have to look at their design the Falcon 9 and the Falcon Heavy both have two stages in a fairing at the top to carry the payload the first stage of the Falcon 9 consists of nine SpaceX manufacture merlin engines at the bottom each one able to emit nine into 14 kilonewtons or 200,000 pounds of thrust once it runs out of propellant it breaks off from the second stage and returns back to ground the second stage fires up a single Merlin engine and continues pushing the payload to its destination the Falcon Heavy works the same way except it has two extra Falcon nine cores attached to the sides it has a total of 27 Merlin engines able to generate 5 million pounds of thrust that liftoff the company's founder and current CEO Elon Musk has reported multiple times that the cost of the first stage is around 35 million dollars and it's around 70% of the total rocket cost this means that the second stage would cost fifteen million dollars and the entire rocket would cost around 50 million it's hard to tell what the other costs add up to because SpaceX doesn't release their financial information but to keep it simple let's just assume it costs at least 50 million dollars to launch the Falcon 9 the price for a customer to launch something up to space is 62 million dollars this would be a 12 million dollar profit for the first launch for the Falcon 9 reusing the first stage to bring the launch cost to around 20 million dollars not including the depreciation and refurbishment cause this is bringing the profit up to 42 million dollars and no time would be wasted having to remanufacture parts since the Falcon Heavy is essentially the same thing as the Falcon 9 except on a larger scale the first stage cost can be estimated at 105 million dollars plus 15 million dollars for the second but the amount charged the customers for the Falcon Heavy is 90 million dollars so without reusing it they leave 30 million if they successfully landed all three cores after each launch they would profit 75 million dollars of course there are other expenses that would cut into their launch profits but the purpose of this is to show a rough estimate of the rocket pricing and potential profitability there is no way to be certain of any numbers until SpaceX releases their own financial information but this is just using what we have so far currently SpaceX does not reuse the second stage of either of the Rockets but they plan on perfecting the reusability system in the future if they did perfect this there would be very little cost for launching a rocket and the process would be extremely quick and this is one of SpaceX's core goals throughout history we have always launched rocketed scott rid of them and built more if iraq it was more like an airplane and just required refueling and some maintenance then there would be huge cost savings just imagine trying to buy a plane ticket if a new plane had to be built for each flight being able to reuse a rocket would not only cost significantly less it would also potentially decrease turnaround time to less than 24 hours if a rock is successfully real and at each of its stages and the payload fairing was recovered they would just have to go through safety inspections and refueling before being ready for reef light however contrary to popular belief space X is not the first to attempt a reusable Launch System nasa's famous space shuttle program from 1969 to 2011 was an attempt to make a reusable spacecraft the shuttle launched like an ordinary rocket but it returned to earth like a plane would they had a payload similar to the Falcon nines and the vision behind the program was to lower the cost of space access just like what SpaceX is trying to do now although it was fairly successful in being reusable there were a lot of miss calculations in terms of operational costs and the speed at which they could do launches it was technically reusable but it took a very long time to repair it and make sure it was safe for launch again the cost for space access was never really reduced by a significant amount and they were still safety issues the program ended in 2011 spacex continued the goal of creating a reusable launch system Spacek says succeeded where nasa has failed so far for multiple reasons but it's too much to get into for this video SpaceX is getting pretty good at landing Rockets now but it took a large investment to get to this point as expected the first few launches for disasters but the company kept on going and never gave up investors stuck with them and new ones still came and eventually in 2008 they successfully launched their first rocket into orbit making SpaceX the first privately funded company to do so in 2012 they reached the ISS and in 2015 they were the first to land in orbital Rockets first stage on land the recent successes of the reusability system have put SpaceX much closer to its end goals and its future profitability looks very bright once the reusable Launch System is perfected and SpaceX can start advancing toward its other goals its revenues and profits will grow large very quickly one of its other plans is creating a space-based Internet communication system called StarLink this network would improve the accessibility of Internet across the planet while eliminating the need for regular internet companies to install or remove cable and needed for Internet service this would disrupt the current internet marketing can be a large potential source of revenue for spacex spacex revealed that it projects 40 million subscribed the star link in more than 30 billion dollars in revenue by 2025 spacex also has plans for space tourism it already has two customers booked for a trip around the moon later this year and although the names and how much they paid weren't revealed Elon did say that it would be around the same amount as a crewed trip to the ISS which should be around fifty eight million dollars per seat Elon Musk estimates that there could be one tourism trip a year and eventually account for 10 to 20 percent of SpaceX's revenue space tourism can also branch out to trips to low-earth orbit the moon and even Mars part of this project's goal is to increase profitability for the company allowing them to fund their next rocket the bfr after the Falcon Heavy this is the next step for SpaceX this rocket will use the same hardware that has been proven to work in the Falcon 9 and the Falcon Heavy but will be able to go to the Moon and Mars while still being able to do the things that other rockets do but on a larger scale another plan for profit involving the bfr is for earthbound travel the bfr would launch a spaceship into orbit filled with passengers traveling to another city it can reach cities across the planet in 30 minutes or less and would act like an airline the ship would reach around 18,000 miles per hour 10 times faster than the fastest commercial airplane and can carry 80 to 200 people per trip if SpaceX could actually bring this to reality successfully watch the bfr and perfect the reusable launch system all of these ideas are very possible and can be seen sooner than we think the main goals of SpaceX is to improve the cost and reliability of space access develop a rapidly reusable Launch System and in the long term interplanetary travel and space colonization these are big goals but just like most companies spacex plans for the long run in fact they are even fine with taking little to no profit to achieve this to achieve these goals they need to take losses like failed rocket launches the initial cost of starting a new project and doing research for new ones if they are able to achieve these goals the revenues as well as the profits will likely take off launch costs can potentially be reduced by tens of millions reusability and turnaround could be perfected and SpaceX could operate with the same grace as an airport perfecting this process would open up so many possibilities and set SpaceX up to achieve all of their goals and secure them for the future thanks for watching and let me know in the comments if you have any suggestions for future videos take care

Channel: Arcane

Views: 607,001

Rating: 4.9099193 out of 5

Keywords: elon musk, spacex, falcon9, falcon heavy, money, finance

Id: SqVTrw9WjeY

Length: 9min 57sec (597 seconds)

Published: Wed Mar 07 2018