[martin8412]

If they have the most advanced rockets and satellites, then surely they can sell those products? The profit from the sales would fund research into their next big product.

Apple didn't keep raising money to pay for the development of their next iPhone. They made sufficient cash from the sale of current generation to fund the development of the next generation.

So if SpaceX needs to continue raising cash, they're selling the product at a loss, meaning that they're not in fact significantly cheaper than the competition. They're just dishonest about their pricing.

[FeepingCreature]

That's not what "selling at a loss" means, it just means their costs are greater than their income. Which, again, is not what "selling at a loss" means - that's production cost per unit being greater than sales income per unit. SpaceX is just dumping a ludicrous amount of money into scaling faster. They could easily be operationally profitable.

[martin8412]

Source for your claim that they could easily be operationally profitable?

[FeepingCreature]

None, they're a private company, but: if a rocket company could be profitable while throwing rockets away, there is no way that SpaceX is not wildly profitable when it's getting them back pretty much in one piece.

[martin8412]

Which again you have no source for. Reusable rockets are more expensive than single use rockets. That's just common sense. There's no proof that SpaceX is even cash flow positive.

[panick21_]

> There's no proof that SpaceX is even cash flow positive.

And you have no proof otherwise. You just assert it without evidence.

And you disagree with everybody that has studied this topic. Pretty much everybody that has estimated cost comes down on the side that SpaceX core launch business is very profitable.

Tons of investors who had insight into this information seem to believe it was a good investment. If the numbers showed that it didn't make sense the whole credibility of Starlink and Starship would instantly collapse.

We don't have detailed numbers but its simply not credible that they have been launching for losing money.

[FeepingCreature]

I don't follow why reusable rockets would be more expensive. In fact, I don't think that's true.

[908B64B197]

> Apple didn't keep raising money to pay for the development of their next iPhone.

But they did raise more money (from Mike Markkula) than what they made from the Apple 1 sales in order to fund the development of the Apple ][.

[panick21_]

> If they have the most advanced rockets and satellites, then surely they can sell those products?

That's just a really strange thing to say. Before you can sell something you have to develop it, build the factory to build it (many times) and then scale up its operation. That takes years and costs many billions.

> The profit from the sales would fund research into their next big product.

The whole point of funding is that you can scale faster. This is like a really really basic thing that I expect everybody on Hacker News to understand. SpaceX did the same thing when they moved from Falcon 1 to Falcon 9.

> So if SpaceX needs to continue raising cash, they're selling the product at a loss, meaning that they're not in fact significantly cheaper than the competition. They're just dishonest about their pricing.

You falsely assume that raising cash implies that products are being sold at a loss. This simply isn't the case, and if that is your understand you are simply wrong. By all information we have from analists, journalist and investors, SpaceX core products they currently sell are very profitable for them. And the Falcon/Dragon architecture continues to see more investment like pad upgrades and other optimizations.

If SpaceX books proved that re-usability doesn't work, why would they be valued so highly in the first place. DoD and NASA have recognized this. Pretty much every other rocket company has recognized this. Even competitors ULA and Arianespace have recognized it. To claim that it is all some vast scam by SpaceX is just not a credible argument.

Arianespace has made this same accusation that you made, but unlike with the case of Boeing they have not brought this case to the WTO. This very likely is because they know they would lose horrible and expose the fact that they actually have far, far, far more direct subsidy in Ariane Group.

Since you don't seem to be moved easily I will give you some actually details of what SpaceX actually does with the raise cash. If your assertion were true, that SpaceX raises cash to finance their operation, where did they get the case for these things:

Raptor:

- Developing the full flow stage combustion engine to fly. They also developed a Raptor Vacuum.

- Raptor continues to get a lot of investment, now on the third iteration. Raptor 3 has just complete its first full test fire. It again breaks its record.

- Volume Raptor manufacturing line in Hawthorne.

- SpaceX is building a new high volume Raptor engine manufacturing facility in McGregor Texas

- They are also expanding testing capabilities there to support the high volume manufacturing.

Starship:

- Huge production facility in South Texas continues to be built up. New major Highbay currently. Additional factory buildings being added right now.

- Launch pad and testing facility are being expanded and upgraded.

- Starship evolution and development continues, with newer version already being built and even newer version are in competent testing.

- Starship heat-shield required a whole new factory, this factory is in Flordia.

- Compenents of Starship are also built in SpaceX facotry in Hawthorne

- SpaceX adding

Starlink:

- SpaceX already has the highest volume satellite factory in the world in Seattle.

- SpaceX is currently building a new even bigger satellite factory in Austin

- SpaceX also need factories to mass produce both ground stations and the terminals.

- Given that Starlink makes SpaceX into a global ISP, SpaceX has to set up offices in every country, go threw regulatory processes in every country. That takes capital as well.

- After initial Starlink sats were designed and mass produced SpaceX didn't stop, Starlink v2 is already being launched with many improvements. Starlink v2 include a complete new propulsion systems, and pioneering inter-satellite laser link.

These are all very capital intensive project and labor intensive development projects, funding these things only with the profit from it current business would be insane. And SpaceX simply could not invest in all of these things at the same time if their core business was bleeding money.

Starlink is already producing significant cash flow with 1.5 million subscribers. SpaceX announced its now cashflow positive. That is quite an achievement given how new the technology is and that the primary launch vehicle that will reduce cost isn't online yet.

Starship is of course not yet making much money. The lunar lander contract with the government is milestone based, that means it will only be paid out when goals are achieved. This means SpaceX needs to raise or lend money to do the development and production so that they can then get it back from NASA once milesstones are achieved.

What SpaceX has raised:

- 2023: 750M

- 2022: 2B

- 2021: 1.5B

- 2020: 2B

- 2019: 1.3B

- 2018: 500M

- 2017: 500M

This if for all the things mentioned above.

Now lets actually compare SpaceX to some competitors:

- Ariane 6, only a marginal upgrade over the Ariane 5 using mostly components already developed for the Ariane 5 ME. Will cost at a minimum 5 billion $ (likely more when its actually done).

- SLS rocket has cost 23 billion $ in development cost.

- All of Project Kuiper is planned to need 3,236 satellites. Just the launch alone will likely cost Amazon 10 billion $.

Given the capital intensity of aerospace projects I think the amount of money SpaceX raised to run 2 of the largest aerospace projects in the history of humanity is pretty damn reasonable.

[martin8412]

A Elon Musk company valued higher than what makes sense.. How novel. Alternative accounting methods are another common theme with Musk.

Startups raise funds to fund production scaling, research, etc. It costs some percentage of the company. Established companies(SpaceX is from 2002) already making profits use part of the profit to fund future research and production. If it's a major capital expense, they'll take on some debt.

[panick21_]

> A Elon Musk company valued higher than what makes sense.. How novel.

I'm sure you are multi billionaire if you always know how companies should be valued.

> Alternative accounting methods are another common theme with Musk.

That's just a baseless accusation TeslaQ people used to throw around about Tesla. And for SpaceX, we don't know anything about their internal accounting.

> If it's a major capital expense, they'll take on some debt.

Companies do what its based base on a number of factors. One is not inherently better then the other.

So in summation you have any actual arguments. Good to know.

[martin8412]

Tesla doesn't use the same accounting methods as any other car manufacturer. Tesla counts pretty much any warranty repair as good will. That means it doesn't eat into their per unit margin. So the number is not in any way comparable to competitors.

We don't know anything about SpaceX accounting, and as such there is no reason to believe anything they state about profitably when they have to continue raising cash. Get your tongue out of Musks' arse, he has a history of lying and the financials aren't public.

[panick21_]

Tesla isn't the same as other car companies, they don't have the dealership models and their repairs are in house. Expecting it to be the exact same as other car manufactures doesn't even make sense. That doesn't make it 'Alternative accounting'.

But by this magical slight of hand, you can't actually prove anything. Its a mostly irrelevant point used by TeslaQ people to distract from the actual numbers.

Because the actual numbers are positive on Tesla they had to come up with some absurd 'its all account fraud nonsense'.

> Tesla counts pretty much any warranty repair as good will. That means it doesn't eat into their per unit margin.

Tesla has Service separated as their own business unit. That is a sensible thing to do.

And yes, Service did lose money for years, because all of Tesla cars were under warranty and they were making large investments building 100s of service centers.

In the last couple years this has already flipped, Service is now profitable, and is about to get more profitable.

So this is just utterly idiotic to accuse Tesla of 'alternative accounting' or assume any kind of deceptions.

The numbers are all their. The are subject to regulation.

And the fundamental underlying profit numbers don't change, no matter how you rearrange the service business. So its just an utterly irrelevant point people like you bring up because they have nothing real to talk about.

> Get your tongue out of Musks' arse

And the true motivation shows itself. You are so hell bent on proving Musk is bad that you threw out your brain.

If simple black and white numbers say one thing, you have to invent some 'accounting fraud' nonsense that every single expert and the SEC disagrees with. And that is utterly irrelevant to boot. Even in the most charitable possible case, your argument means that per unit margin reported compared to other car companies should by the slightest bit different. Wow, truly the whole Tesla leadership should thrown into the gulag.

If you don't have the numbers black and white, you just make the worst possible assumptions. No matter how many expects, journalist, annalists and investors disagree with your assessment. And you clearly don't even know anything about space business, you are in it to prove Musk and SpaceX is bad, not driven by an actual analysis of SpaceX other then 'they raise money'.