[ben_w]

Huge negative margins, according to the article:

  "Starting with the reusable rockets, MS expects SpaceX to eat itself. Launch costs will collapse by more than 99 per cent versus their historical average within 10 years, it says. Operating margin on launches will have jumped to about 40 per cent, from around negative 50 per cent currently, but 40 per cent of less than 1 per cent still isn’t very much."

Though as someone (probably JumpCrisscross, can't remember) pointed out a previous time this came up, as SpaceX is selling launch to Starlink, and also own Starlink, which one of the two gets to count as making a profit or a loss is just a matter of preference.

[adastra22]

This is my industry I know it well, apparently much better than these bozos. SpaceX launch is only “unprofitable” only in the accounting sense because they reinvest their profits into Starship. Their actual profit margin for launch of F9 is 62% - 80% depending on configuration. That is a margin unheard of in aerospace.

There is literally no competition worth speaking of, and nobody to provide downward price pressure. SpaceX started moving into their own constellations because lower prices open up new markets, and this lets them access those markets without having to lower launch prices.

And if you think, as Morgan Stanley seems to, that the only money to be made in space is selling launch of earth orbiting satellites, you’re going to miss out on the boom that is going to make the first quadrillionaire.

[TheOtherHobbes]

China and other competitors have other ideas, even if you're not aware of them.

When your whole pitch is that you're commoditising a technology, don't be surprised when you get a commoditised market.

[adastra22]

China (and others, e.g. Blue Origin and Rocket Lab) are rushing to catch up to where SoaceX was 10 years ago. They are moving faster than anyone in aerospace has ever moved before, but SpaceX is still accelerating faster than that. By the time they catch up, the game will have again changed.

SpaceX and NVIDIA share this trait. They out-innovate, and know only one speed: the speed of light. The tortoise can only beat the hare if the hare takes a nap, and nobody is napping at SpaceX.

I’m not a fanboy. I have criticisms of SpaceX. But you are pattern matching to the common story of startups getting complacent and being surpassed by up-comers in China and elsewhere. But the innovators dilemma only applies if the innovator stops innovating. Two decades on, SoaceX is still innovating as much as they always have.

[ben_w]

> They are moving faster than anyone in aerospace has ever moved before, but SpaceX is still accelerating faster than that. By the time they catch up, the game will have again changed.

That was a believable pitch up to around 2020 or so.

In 2018 they announced they were going to send a private crewed mission around the moon in 2023. Now we have the benefit of hindsight, it's 2026 and the vessel they were going to use has not yet had one circularised orbit.

Not to put too fine a point on it, but at this point Starship development is currently going slower than both the historical analogs, the Saturn V and the Space Shuttle.

[adastra22]

That has been how Elon always operates. It’s “green lights to Malibu” timeline estimation. He does it for a reason.

[ben_w]

That much has always been obvious, however (1) note final paragraph, and (2) the stock price estimates (both SpaceX and Tesla) are also based on "green lights to Malibu" degrees of optimism.

[rsynnott]

I mean, given the pyrotechnics, the most obvious historical analog is the N1.

[ben_w]

Perhaps, and good suggestion regardless, but the Soviet leadership was so adverse to negative publicity that it's hard to be sure how happy they were with hardware-rich testing.

Throwing cheap rockets into the air until they don't explode worked fine for Falcon; but given how long it's taking, I'm not sure it's working okay for Starship, and I'm now completely convinced that this is a *terrible* way to make something that's supposed to land on Mars, refuel, and return.

[small_model]

Their lead is insurmountable, might bleed 1/2% to china but they own launch market and will do for the next century.

[SideQuark]

You’re claiming in 10 years they made something others won’t for another century? This has no historical precedent.

China is going to eat them, just like they ate Teslas insurmountable lead in a few short years.

[small_model]

Whats the best selling car in the world? Model Y at 4x the price of number 2. So nope, your claim died on first hurdle. Try harder

[ben_w]

No, the best selling car in the world is the Toyota RAV4: https://en.wikipedia.org/wiki/Toyota_RAV4

The best selling EV brand in the world is BYD: https://cleantechnica.com/wp-content/uploads/2026/05/2026-03...

The best selling EV model in the world is the Model Y.

Saying "Oh but the Model Y" is like how when the original iMac came out, Apple turned out to be selling the single most popular model of retail PC in the US despite Apple also having 3% of the world market. Putting a lot of wood behind few arrows does make those arrows look bigger.

[rsynnott]

Well, first of all, it isn't. It's the best-selling EV, but this is largely due to the fact that Tesla has a very different product approach to the other big EV manufacturers. Tesla has exactly two real models. BYD and VW AG have basically too many models to count, with multiple brands each.

[SideQuark]

Ah, trying to move the goalposts huh?

What’s the number of Teslas sold per year? Declining year over year as others have grown significantly. Profit margin sans regulatory issues? Peaked 2021, declining since then. Same in about every company wide metric.

BYD? Most all such metrics over the same period doubled to quadrupled. They outsell Tesla. They have better tech than Tesla. They’re clearly out innovating and outselling Tesla.

And, as the other poster made clear, your moving-the-goalposts let’s-ignore-the-rest claim doesn’t even stand slight scrutiny. Try harder indeed.

[rsynnott]

Has any company ever dominated _any_ major market for a century? Struggling to think of one.

[ben_w]

I can think of one, but it was awful: https://en.wikipedia.org/wiki/East_India_Company

Could be relevant if that whole "robot army" happens.

[rsynnott]

Doesn’t really count; that was more or less just a weird _country_ cosplaying as a company.

(There were a few of them. Fortunately it did not really survive as a concept)

[panick21_]

You clearly don't know the market. China is no competition just on geopolitical terms. And I am very aware of the competition and have followed each competitor basically since its founding. It will take many years before competitors will be fully read and even then their launch rates will be tiny in comparison. And by then SpaceX will have moved on.

But of course this is all dwarfed by AI stuff financially so its basically irrelevant. SpaceX could stop all launch sales tomorrow with zero impact on its financials.

[close04]

> This is my industry I know it well

How far ahead is SpaceX compared to the competition, a decade? More? Less? Is the gap closing or growing?

> Their actual profit margin for launch of F9 is 62% - 80% depending on configuration. That is a margin unheard of in aerospace.

Do you expect they maintain these margins on launch and whatever services they deliver from space as that gap is closing? Is their first mover advantage practically unassailable because it's in space? Tesla built the EV market and are having their lunch eaten by the competition.

[adastra22]

The rest of the industry is about 10 years beyond SpaceX. But note that they are where SpaceX was a decade ago, which is not the same thing as “in 10 years they will catch up.” The gap is getting larger year by year, not smaller.

[tavavex]

> The gap is getting larger year by year, not smaller.

Why? Logically it would seem that learning how to do something that's already been done would be easier than discovering it. SpaceX has already done a lot of the work and has shown the others that it's possible and how they do it. Why won't the others catch up? I can't think of any industry that has a market leader that only gets further away from their competition forever.

[xoa]

>I can't think of any industry that has a market leader that only gets further away from their competition forever.

You're on Hacker News and you can't think of silicon fabrication? What brand new players do you think are about to catch up to TSMC or Samsung? Or what about advanced jet turbine engines, why is China still having such trouble matching the performance of existing leaders after decades of work? Or operating systems, it's been Apple, BSD, Google, Linux, and Microsoft (or derivatives of these) for a long time. Or web browser engined. Or...

Some things are just really hard and involve enormous amounts of specifics, sunk costs and so on. Even if you know it's possible the implementation is everything, the idea that everything is trivially RE'd/cloned seems to have its limits in the real world.

[close04]

> You're on Hacker News and you can't think of silicon fabrication?

Ugh... past performance doesn't predict future performance. Why do you think that SpaceX's or ASML's advantages cannot be overcome by competitors? Some are very motivated and will not hold back from any method to get any industrial secrets from the current leaders. If one person can think of it, so can another, eventually.

A decade ago Tesla was the king of EVs.

[tavavex]

But I wasn't talking about things that are just hard to replicate. I was talking about companies that keep getting further away from anyone matching them, forever. No one can match ASML's prowess, but do you think that China today is further from catching up to them than they were 10 years ago? Going from nothing to modern silicon fabrication is a lot harder than going from existing knowledge but no expertise/technology to implement it, to actually making it happen. That's my point.

You have a valid point about ecosystems though - that is a rare exception where first movers can keep holding onto their advantage that I hadn't thought of. However, it's not really applicable when talking about a commodity like space launches.

[adastra22]

Because SpaceX moves faster. I’m telling you an empirical fact: three years ago the rest of the industry was 8 years behind SpaceX. This year they are ten years beyond. The gap is widening not shrinking.

[close04]

> which is not the same thing as “in 10 years they will catch up."

This is reasonable, unless SpaceX is stagnating for a decade there will still be some gap in 10 years too.

> The gap is getting larger year by year, not smaller

This is where the reasoning fails me. Unless you're making an unstated assumption about SpaceX or the competitors, why would the gap grow? As soon as there's a decent competitor, SpaceX's margins will get slashed. Their advancement will have to be supported by margins that can only shrink.

Followers can even have an easier time catching up because they have a working model in front of them. The leader has not only to execute but constantly innovate just to maintain a constant lead. The challengers "just" have to execute well because they can copy the leader's innovation until they catch up. And some of the competitors are more than willing and capable of extreme measures to copy.

Is there any field where over several decades the gap between the leader and the challengers just grew? It's not my industry but I have the personal impression that your "gap growing forever" opinion will age like milk left in the sun. We'll see.

[adastra22]

Because year by year the gap is growing. I’m talking about a historical trend, and that’s just a fact about it. The gap has been growing, not shrinking.

[JKCalhoun]

"The gap is getting larger year by year, not smaller."

You keep saying this—you'll have to explain. Very little in the world has ever worked like this—the opposite has generally been the case.

[adastra22]

No it’s not on me to explain why. I’ve just been watching this company since 2008, and seen them break ahead of the competition and then stay ahead as they move faster than anyone else. I’m saying the historical trend line has that gap widening. That’s a statement of fact, no “why” involved.

If you want to know the why’s I suggest reading Eric Berger’s two books Liftoff and Reentry.

[ben_w]

> And if you think, as Morgan Stanley seems to, that the only money to be made in space is selling launch of earth orbiting satellites, you’re going to miss out on the boom that is going to make the first quadrillionaire.

I was with you up to this point.

Quadrillionaire? Seriously? On species-wide economy of 0.1Q/year? On a timescale short enough that SpaceX remains a coherent entity and you don't have to account for things like the sum-total risk of nuclear war? Or even just of Musk dying of old age given he's 55?

[adastra22]

The material wealth of the Earth is only a small, small fraction of the accessible material in the inner solar system, let alone the universe.

Starship fundamentally changes the game in ways people aren’t paying attention to because it pattern matches to sci-fi. But the economics are real: power and material far beyond what is available on Earth, on many cases at lower marginal price than terrestrial sources, and 1000x to 100000x reserves.

[ben_w]

> The material wealth of the Earth is only a small, small fraction of the accessible material in the inner solar system, let alone the universe.

And you think you can access that in 30 years?

That's the problem here. Market valuations for, say, the USA, do not count the entire value of the nickel and iron down to the planet's core.

> Starship fundamentally changes the game in ways people aren’t paying attention to because it pattern matches to sci-fi. But the economics are real: power and material far beyond what is available on Earth, on many cases at lower marginal price than terrestrial sources, and 1000x to 100000x reserves.

No, it doesn't. I've done the maths here. At best, and with a better track record than Musk has actually demonstrated, if we use the USA as a metaphor for a the K2 civilisation Musk talks about with lunar-tiling factories making nothing but data centre satellites (done the maths on that too, that's what it would take and even then be borderline on thermodynamics grounds), Starship can be the Mayflower. Not even the Oregon Trail, certainly not the railroad network.

And fundamentally it isn't coherent to talk about "lower marginal price" when space mining has a TRL of 1 or 2. Might be cheap eventually, but pricing that in right now would be an error of judgment (aside from anything else, the tech to make it cheap may also make stuff here cheaper).

The only way this happens in my lifetime, and I'm younger than Musk, is if someone solves for von Neumann replicators. Which I won't rule out, but Musk hasn't demonstrated any special sauce for this to make me think he'd do it before anyone else.

[Hikikomori]

We don't even go for available materials on earth if they're slightly hard to get.

[aczerepinski]

Can’t rule out hyperinflation doing some heavy lifting :)

[ben_w]

Yeah, indeed, I was assuming in constant today-dollars. :)

[rithdmc]

In which currency? 1 billion Rupiah is less than 60,000 usd ;)

A quadrillionaire would only need $60 billion or so.

[adgjlsfhk1]

> SpaceX started moving into their own constellations because lower prices open up new markets, and this lets them access those markets without having to lower launch prices

the alternate take here is that even at current prices, falcon 9 is more than capable of completely filling space demand which makes building a >10x bigger vehicle seem kind of dumb

[stoneman24]

I think the main idea for starship is fully reusable ( which falcon 9 isn’t) and much larger capacity (both volume and mass). Driving down the cost of getting mass to orbit.

I googled and got the following costs per kg to orbit Falcon approx $3000 / kg Starship (early) $600 / kg Starship (target) $ 100 / kg

If they can achieve the target, it’s transformative. The Chinese will follow the lead and be available for some commercial customers but the majority of the market will be SpaceX.

[ben_w]

Starship would be really good even if they can't make it reusable, but still hit the early-user price tags and capacity to LEO they're talking about for expendable-mode launches, even if they then stop improving.

But unless there's demand for launching a lot more stuff, that's not going to help them make a lot of money.

I can buy into a vision of several competing Starlink-like constellations. Can't buy into one about space-based data centres. And we need a lot more demonstrations of space colony precursor tech before I'm going to even have a strong opinion about the economics of space colonies*, either for or against: they're technically feasible, but so too is one on the sea floor, or the middle of Antarctica; and there's people who already build homes for themselves in the middle of the Sahara and at high altitude on mountains, but these aren't *huge* money-makers, just standard boring ones.

* they are cool though; if Musk had actually delivered on the Mars flights that were supposed to have already arrived two years ago, and also not turned out to be who he turned out to be, I'd have considered being an early Martian: https://techcrunch.com/2020/12/01/elon-musk-says-spacex-will...