1 00:00:01,920 --> 00:00:05,320 Hey everybody, welcome back to the Elon Musk podcast. 2 00:00:05,360 --> 00:00:08,680 This is a show where we discuss the critical crossroads that 3 00:00:08,680 --> 00:00:13,520 shape SpaceX, Tesla X, The Boring Company, and Neuralink. 4 00:00:13,680 --> 00:00:18,000 And I'm your host, Will Walden. So right now, the space industry 5 00:00:18,000 --> 00:00:21,840 is witnessing pretty big shift in the cost dynamics of 6 00:00:21,840 --> 00:00:26,400 launching rockets into space. And SpaceX in a Falcon 9 rocket 7 00:00:26,800 --> 00:00:31,800 which offering launches for as low as $67 million, has been a 8 00:00:31,800 --> 00:00:36,000 disruptive force in reducing space travel cost for about a 9 00:00:36,000 --> 00:00:39,920 decade now. Now, in a remarkable crazy turn 10 00:00:39,920 --> 00:00:44,200 of events, ULA the United Launch Alliance with it's at a joint 11 00:00:44,200 --> 00:00:48,280 venture between aerospace giants Boeing and Lockheed Martin. 12 00:00:48,840 --> 00:00:52,160 They're showing a formidable challenge to SpaceX with the 13 00:00:52,160 --> 00:00:55,760 Vulcan Centaur rocket, brand new rocket that's potential 14 00:00:55,760 --> 00:00:59,240 levelling of the playing field with this competitive space 15 00:00:59,240 --> 00:01:01,240 market. Between SpaceX and every other 16 00:01:01,240 --> 00:01:05,360 competitor you know, Spacex's journey in lowering space travel 17 00:01:05,360 --> 00:01:09,560 costs has been pretty well documented, slashing prices from 18 00:01:09,560 --> 00:01:14,960 1 standard $400 million per launch to about $70 million. 19 00:01:15,280 --> 00:01:18,080 And the development of their Starship vehicle, aiming to 20 00:01:18,080 --> 00:01:21,960 launch more cargo for a significantly less, shows that 21 00:01:22,320 --> 00:01:25,160 they're going to get even better at what they do. 22 00:01:25,560 --> 00:01:29,640 However, despite the progress, the Starship is yet to complete 23 00:01:29,640 --> 00:01:32,600 a successful test flight to orbit, leaving room for 24 00:01:32,600 --> 00:01:35,560 competitors to play a little bit of catch up here. 25 00:01:36,240 --> 00:01:42,640 Now ULA, which is long perceived as an old space program and 26 00:01:42,640 --> 00:01:45,960 they're trailing behind SpaceX in cost effectiveness, appears 27 00:01:45,960 --> 00:01:49,160 to have made it a leap forward with the Vulcan Centaur rocket. 28 00:01:49,840 --> 00:01:52,440 Originally replacing the costly D4 Heavy. 29 00:01:52,640 --> 00:01:56,080 The Centaur rocket is being positioned by ULA is a cost 30 00:01:56,080 --> 00:01:59,560 competitive alternative to Spacex's Falcon 9 and other 31 00:01:59,560 --> 00:02:04,120 offerings, with an aim to launch for under $100 million. 32 00:02:05,160 --> 00:02:09,520 Now, the allocation of 21 launch contracts by the US Space Force, 33 00:02:09,800 --> 00:02:13,200 split almost evenly between SpaceX and ULA, has been a 34 00:02:13,200 --> 00:02:15,840 spotlight on the pricing strategies of both companies. 35 00:02:16,360 --> 00:02:20,800 ULA secured 11 launches at an average cost of about $118 36 00:02:20,800 --> 00:02:24,440 million per launch. Marginally undercutting SpaceX 37 00:02:24,440 --> 00:02:30,000 is $120 million per launch now. This suggests a very narrow gap 38 00:02:30,000 --> 00:02:33,840 now between the two rivals, and despite the apparent parody and 39 00:02:33,840 --> 00:02:37,880 launch costs, a deeper analysis reveals nuances though. 40 00:02:38,960 --> 00:02:42,560 Ula's launches are all slated for the Vulcan Centaur, whereas 41 00:02:42,560 --> 00:02:46,800 Spacex's contracts include both Falcon 9 and the more expensive 42 00:02:46,800 --> 00:02:49,680 Falcon Heavy launches. Adjusting for this mix, Big 43 00:02:49,680 --> 00:02:53,720 Six's Falcon 9 launches would still be slightly more expensive 44 00:02:53,720 --> 00:02:56,840 on average, but the difference is increasingly marginal now. 45 00:02:56,840 --> 00:02:59,920 The pricing parity between SpaceX and ULA raises questions 46 00:02:59,920 --> 00:03:02,080 about the future financial performance of Boeing and 47 00:03:02,080 --> 00:03:04,440 Lockheed Martin, though, which is the parent companies, the 48 00:03:04,480 --> 00:03:06,760 ULA. And there's speculation that 49 00:03:06,760 --> 00:03:09,040 they might sell ULA. But even if they retain 50 00:03:09,040 --> 00:03:12,840 ownership, the impact on revenue and profit margins remains 51 00:03:12,840 --> 00:03:15,840 uncertain. Lockheed has already seen a 52 00:03:15,840 --> 00:03:18,760 decline in space revenue and profit margins due to 53 00:03:18,760 --> 00:03:22,320 competition from SpaceX. And if the Vulcan Centaur proves 54 00:03:22,320 --> 00:03:26,360 cheaper to build and operate than UL as previous outlets and 55 00:03:26,360 --> 00:03:29,680 Delta rockets, it could stabilize or even improve the 56 00:03:29,680 --> 00:03:31,720 company's financials. This will be a welcome 57 00:03:31,720 --> 00:03:34,840 development for investors in Bowie and Lockheed, aligning 58 00:03:34,840 --> 00:03:38,760 with ULACEO Tory Bruno, friend of the show commitment to 59 00:03:38,760 --> 00:03:41,800 reducing launch costs. Now SpaceX continues to 60 00:03:41,800 --> 00:03:44,720 demonstrate its capabilities with recent successful launches. 61 00:03:44,720 --> 00:03:48,680 The USSF 52 mission for the US Space Force using the Falcon 62 00:03:48,680 --> 00:03:51,760 Heavy was launched from Kennedy Space Center carrying the Boeing 63 00:03:51,800 --> 00:03:55,160 built X37B. They work together here, and 64 00:03:55,160 --> 00:03:58,120 this mission highlights that SpaceX will of course work with 65 00:03:58,120 --> 00:04:00,240 anybody, as long as they're giving the money to launch 66 00:04:00,240 --> 00:04:03,440 whatever they want to launch. Now, the X37B, which is a 67 00:04:03,440 --> 00:04:06,880 reusable spacecraft, it's a space plane similar to the old 68 00:04:06,880 --> 00:04:10,200 space shuttle, is set to test new space domain awareness 69 00:04:10,200 --> 00:04:12,000 technologies and other experiments. 70 00:04:12,240 --> 00:04:15,080 Now this mission, according to Boeing's top secret, will push 71 00:04:15,120 --> 00:04:17,920 the boundaries of space exploration and offer benefits 72 00:04:18,200 --> 00:04:20,880 to the wider space faring community. 73 00:04:21,360 --> 00:04:25,120 And this is an innovative program by Boeing and the Space 74 00:04:25,120 --> 00:04:27,920 Force launched on a Falcon Heavy rocket. 75 00:04:28,200 --> 00:04:31,880 Now, the successful launch of the USSF 52 mission shows that 76 00:04:31,880 --> 00:04:34,320 the US Space Force's dedication of national security and 77 00:04:34,320 --> 00:04:39,240 technological advancement, and they will use any vendor that 78 00:04:39,520 --> 00:04:43,240 will give them a good price. So could it be ULA? 79 00:04:43,240 --> 00:04:44,640 Could it be SpaceX in the future? 80 00:04:44,640 --> 00:04:48,000 We're not 100% sure, but probably both in the coming 81 00:04:48,000 --> 00:04:49,920 years. Now, the recent developments in 82 00:04:49,920 --> 00:04:53,880 the space launch market reflect a kind of evolving landscape 83 00:04:53,880 --> 00:04:56,080 here, where price competitiveness is finally 84 00:04:56,080 --> 00:05:00,200 becoming increasingly crucial. Companies like ULA have had high 85 00:05:00,200 --> 00:05:05,520 prices 4 decades, and now ULAS, Vulcan, Centaur, and Spacex's 86 00:05:05,520 --> 00:05:08,880 Falcon 9 and Falcon Heavy rockets are at the forefront of 87 00:05:08,880 --> 00:05:12,360 these shifts, offering more cost effective solutions for both 88 00:05:12,360 --> 00:05:14,520 commercial and government space missions. 89 00:05:15,360 --> 00:05:18,880 And as ULA and SpaceX continue to vie for dominance in the 90 00:05:18,880 --> 00:05:22,000 space launch market, the industry is likely to witness 91 00:05:22,000 --> 00:05:24,040 further innovations and cost reductions. 92 00:05:24,480 --> 00:05:27,720 The competition between these two mega giants not only 93 00:05:27,720 --> 00:05:30,760 influences the respective financial performances, but also 94 00:05:30,760 --> 00:05:33,880 shapes the future trajectory of space exploration and tech. 95 00:05:34,320 --> 00:05:36,600 Now, investors in Boeing, Lockheed Martin, and other 96 00:05:36,600 --> 00:05:39,480 companies involved in the space industry will closely monitor 97 00:05:39,480 --> 00:05:41,360 this. The balance between maintaining 98 00:05:41,360 --> 00:05:44,600 profitability and staying competitive in pricing will be 99 00:05:44,600 --> 00:05:48,400 crucial for these companies to continue offering services to 100 00:05:48,400 --> 00:05:51,720 the government Now. This reduction in launch cost 101 00:05:51,720 --> 00:05:56,120 has broader implications for the overall space exploration field. 102 00:05:56,520 --> 00:05:58,880 Lower costs open up new possibilities for scientific 103 00:05:58,880 --> 00:06:03,880 research, satellite deployment and even human rated crude 104 00:06:03,880 --> 00:06:06,800 missions to space. Now this could potentially 105 00:06:06,840 --> 00:06:11,160 accelerate the pace of discovery and innovation in outer space. 106 00:06:11,920 --> 00:06:15,400 Government entities like the US Space Force also play a role in 107 00:06:15,400 --> 00:06:19,000 this, not only as customers, but also as partners in advancing 108 00:06:19,000 --> 00:06:22,720 technological capabilities. Their contracts and missions are 109 00:06:22,720 --> 00:06:25,560 vital for the sustained growth and development of space 110 00:06:25,560 --> 00:06:28,720 capabilities. Most of our technology now was 111 00:06:28,720 --> 00:06:33,000 built in the space age when government contracts were huge 112 00:06:33,000 --> 00:06:36,760 with companies like this and they innovative so many 113 00:06:36,880 --> 00:06:40,880 technological leaps due to this competition. 114 00:06:40,880 --> 00:06:45,480 So SpaceX, ULA, this competition is great, not just for them, but 115 00:06:45,480 --> 00:06:48,960 for all of us involved. Now, this is an important 116 00:06:48,960 --> 00:06:53,760 juncture right now between ULA, Vulcan Centaur, and Spacex's 117 00:06:53,760 --> 00:06:57,480 Falcon 9 Falcon Heavy rockets. This competition is not just 118 00:06:57,480 --> 00:07:00,600 about market share though, and not just about money, but also 119 00:07:00,600 --> 00:07:03,840 about our own futures. And these companies will 120 00:07:03,840 --> 00:07:07,440 continue to innovate and will continue to drive down costs. 121 00:07:07,800 --> 00:07:10,960 Because if they can drive down costs, they'll get more money 122 00:07:10,960 --> 00:07:13,520 from the government and more money from the Department of 123 00:07:13,520 --> 00:07:15,600 Defense. And they'll innovate for all of 124 00:07:15,600 --> 00:07:18,040 us. Hey, thank you so much for 125 00:07:18,040 --> 00:07:20,240 listening today. I really do appreciate your 126 00:07:20,240 --> 00:07:21,760 support. If you could take a second and 127 00:07:21,760 --> 00:07:24,680 hit the subscribe or the follow button on whatever podcast 128 00:07:24,680 --> 00:07:27,680 platform that you're listening on right now, I greatly 129 00:07:27,680 --> 00:07:29,320 appreciate it. It helps out the show 130 00:07:29,320 --> 00:07:31,400 tremendously. And you'll never miss an 131 00:07:31,400 --> 00:07:34,000 episode. And each episode is about 10 132 00:07:34,000 --> 00:07:36,560 minutes or less to get you caught up quickly. 133 00:07:36,560 --> 00:07:39,640 And please, if you want to support the show even more, go 134 00:07:39,640 --> 00:07:45,160 to Atreoncom, Stage Zero, and please take care of yourselves 135 00:07:45,160 --> 00:07:47,040 and each other and I'll see you tomorrow.