Hey everybody, welcome back to the Elon Musk podcast.
This is a show where we discuss the critical crossroads that
shape SpaceX, Tesla X, The Boring Company, and Neuralink.
And I'm your host, Will Walden. So right now, the space industry
is witnessing pretty big shift in the cost dynamics of
launching rockets into space. And SpaceX in a Falcon 9 rocket
which offering launches for as low as $67 million, has been a
disruptive force in reducing space travel cost for about a
decade now. Now, in a remarkable crazy turn
of events, ULA the United Launch Alliance with it's at a joint
venture between aerospace giants Boeing and Lockheed Martin.
They're showing a formidable challenge to SpaceX with the
Vulcan Centaur rocket, brand new rocket that's potential
levelling of the playing field with this competitive space
market. Between SpaceX and every other
competitor you know, Spacex's journey in lowering space travel
costs has been pretty well documented, slashing prices from
1 standard $400 million per launch to about $70 million.
And the development of their Starship vehicle, aiming to
launch more cargo for a significantly less, shows that
they're going to get even better at what they do.
However, despite the progress, the Starship is yet to complete
a successful test flight to orbit, leaving room for
competitors to play a little bit of catch up here.
Now ULA, which is long perceived as an old space program and
they're trailing behind SpaceX in cost effectiveness, appears
to have made it a leap forward with the Vulcan Centaur rocket.
Originally replacing the costly D4 Heavy.
The Centaur rocket is being positioned by ULA is a cost
competitive alternative to Spacex's Falcon 9 and other
offerings, with an aim to launch for under $100 million.
Now, the allocation of 21 launch contracts by the US Space Force,
split almost evenly between SpaceX and ULA, has been a
spotlight on the pricing strategies of both companies.
ULA secured 11 launches at an average cost of about $118
million per launch. Marginally undercutting SpaceX
is $120 million per launch now. This suggests a very narrow gap
now between the two rivals, and despite the apparent parody and
launch costs, a deeper analysis reveals nuances though.
Ula's launches are all slated for the Vulcan Centaur, whereas
Spacex's contracts include both Falcon 9 and the more expensive
Falcon Heavy launches. Adjusting for this mix, Big
Six's Falcon 9 launches would still be slightly more expensive
on average, but the difference is increasingly marginal now.
The pricing parity between SpaceX and ULA raises questions
about the future financial performance of Boeing and
Lockheed Martin, though, which is the parent companies, the
ULA. And there's speculation that
they might sell ULA. But even if they retain
ownership, the impact on revenue and profit margins remains
uncertain. Lockheed has already seen a
decline in space revenue and profit margins due to
competition from SpaceX. And if the Vulcan Centaur proves
cheaper to build and operate than UL as previous outlets and
Delta rockets, it could stabilize or even improve the
company's financials. This will be a welcome
development for investors in Bowie and Lockheed, aligning
with ULACEO Tory Bruno, friend of the show commitment to
reducing launch costs. Now SpaceX continues to
demonstrate its capabilities with recent successful launches.
The USSF 52 mission for the US Space Force using the Falcon
Heavy was launched from Kennedy Space Center carrying the Boeing
built X37B. They work together here, and
this mission highlights that SpaceX will of course work with
anybody, as long as they're giving the money to launch
whatever they want to launch. Now, the X37B, which is a
reusable spacecraft, it's a space plane similar to the old
space shuttle, is set to test new space domain awareness
technologies and other experiments.
Now this mission, according to Boeing's top secret, will push
the boundaries of space exploration and offer benefits
to the wider space faring community.
And this is an innovative program by Boeing and the Space
Force launched on a Falcon Heavy rocket.
Now, the successful launch of the USSF 52 mission shows that
the US Space Force's dedication of national security and
technological advancement, and they will use any vendor that
will give them a good price. So could it be ULA?
Could it be SpaceX in the future?
We're not 100% sure, but probably both in the coming
years. Now, the recent developments in
the space launch market reflect a kind of evolving landscape
here, where price competitiveness is finally
becoming increasingly crucial. Companies like ULA have had high
prices 4 decades, and now ULAS, Vulcan, Centaur, and Spacex's
Falcon 9 and Falcon Heavy rockets are at the forefront of
these shifts, offering more cost effective solutions for both
commercial and government space missions.
And as ULA and SpaceX continue to vie for dominance in the
space launch market, the industry is likely to witness
further innovations and cost reductions.
The competition between these two mega giants not only
influences the respective financial performances, but also
shapes the future trajectory of space exploration and tech.
Now, investors in Boeing, Lockheed Martin, and other
companies involved in the space industry will closely monitor
this. The balance between maintaining
profitability and staying competitive in pricing will be
crucial for these companies to continue offering services to
the government Now. This reduction in launch cost
has broader implications for the overall space exploration field.
Lower costs open up new possibilities for scientific
research, satellite deployment and even human rated crude
missions to space. Now this could potentially
accelerate the pace of discovery and innovation in outer space.
Government entities like the US Space Force also play a role in
this, not only as customers, but also as partners in advancing
technological capabilities. Their contracts and missions are
vital for the sustained growth and development of space
capabilities. Most of our technology now was
built in the space age when government contracts were huge
with companies like this and they innovative so many
technological leaps due to this competition.
So SpaceX, ULA, this competition is great, not just for them, but
for all of us involved. Now, this is an important
juncture right now between ULA, Vulcan Centaur, and Spacex's
Falcon 9 Falcon Heavy rockets. This competition is not just
about market share though, and not just about money, but also
about our own futures. And these companies will
continue to innovate and will continue to drive down costs.
Because if they can drive down costs, they'll get more money
from the government and more money from the Department of
Defense. And they'll innovate for all of
us. Hey, thank you so much for
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