Thursday, April 17, 2014

Economic issues of reusable SpaceX launch vehicles

What could happen if SpaceX achieves reusability? They say the F9R could cost $7m compared to today's $56m for an F9 launch. Would anyone pay $56m when they could pay $7? Where would the supply of used vehicles come from? It is much more likely that F9R would be priced somewhat higher so that the choice between the two were closer to a 50/50 decision. Customers like NASA would probably continue to choose only new launch vehicles.

They did announce $7m and others would complain, but all they have to do is not offer it at that price. New vehicle launches will not dry up by simply choosing an appropriate used vehicle price. What this means is the competition is going to have to work a lot harder or dry up completely.

What competition? None of the established claim to be working on reusability. Blue Origin seems to be the only one on the horizon.

SpaceX expects that launches are elastic and demand will go up. But to compete others may have to license their technology. Could SpaceX become another Intel? Before cell phones it looked like Intel might have driven every competitor out of business. Now others seem to have a fighting chance. So what are the other markets SpaceX envisions?

The MCT will be produced for one: Space settlement beginning with mars. If you can settle mars, you can pretty well settle anyplace else. Although no other place has the integral resources of mars. I do mean integral: necessary to make a whole complete; essential or fundamental.

Other markets they've probably discovered during their dragonlab seminars. Those that haven't pursued reusability may never have heard from such customers other than the general lament you hear that things can't happen until costs come down which is a myth in itself. Who would argue that price reduction is a bad thing?

Those that think the 30% performance cost of reusability keeps them in the game have not considered Raptor which will be the next game changer.

In an arrangement unusual for launch vehicles... reminds me of that old Johnny Carson joke about Reagan vs. Jimmy Carter... Reagan talked congress into his programs and Carson said that Jimmy asked, "You can do that?"

The testing program continues with each F9 launch which makes it possible the F9R will fly before the end of this year. It will be interesting to see how the competition responds?

Update: ok, Rand never comes here to comment but I know him well enough that he would take issue with "things can't happen until costs come down which is a myth in itself." Obviously some things certainly would be possible at lower costs that will not happen now. My brain wasn't meaning that. What I was meaning is that some risk can be taken even at today's costs. So to say those can't is the myth. I like mom and apple pie too.


C J said...

Great points.

My guess is they'll have customers for the full-pop 56 mil launches; those that need the full payload capacity, and/or won't accept a "used" rocket.

For Falcon Heavy, my guess is this will very much apply; they'll need to go for full capacity (no reuse) on some missions, when the customer needs it.

My guess regarding the new/used safety issue; it'll take quite a while to show it, but the "used" may actually prove safer.

One huge market for very high mass payloads is NRO. Photorecon birds in Leo use quite a bit of fuel (due to low orbit, but mainly due to needing to change orbit fairly often). We're talking birts at over two billion each with fuel being their main life limiter (about 18 months to 2 years is average) so the idea of a a bird with a lot more fuel would be very appealing. For example, if increasing the fuel load by double gave you 6 more months of operations, that's be a savings (based on the per month lifetime cost) of around half a billion. Is that worth paying for a non reusable FH? Very much so.

ken_anthony said...

I'm just waiting to see the used RV space ship market open up!