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Comment by davej | Hacker News Reader

> SpaceX’s president, Gwynne Shotwell, estimates that reusing these landed Falcon 9 vehicles will lead to a 30 percent reduction in launch costs, according to Space News.

Surely it will be more than a 30% reduction once they make the rocket refactoring process more efficient? I've heard Elon say that the savings would be an order of magnitude given how low the cost of fuel is relative to everything else on the rocket.

I know Elon is famously optimistic and Gwynne is probably dampening expectations on purpose but 30% doesn't seem very impressive. Is Gwynne just playing down the cost savings or is she likely to be accurate, even in the medium term (3-5 years)?

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It doesn't make much business sense to pass along ALL the efficiency savings directly to your customers.

30% reduction in launch costs will be hugely welcomed and SpaceX will be able to do lots with the additional revenue.

Plus their launch backlog is already pretty full since they are undercutting all the incumbent providers... no sense in decreasing their margins if the current prices are very competitive.

Perhaps I misunderstood what Gwynne was saying. I thought that "launch costs" would be the cost of launching a rocket for SpaceX, rather than the price that they set for customers.

Perhaps your correct though, the quote is a bit ambiguous.

"It's saving 90% in launch costs, but we're only passing 30% of the savings along to the customer" doesn't sound very good in a press release.

Costs per launch include fuel (trivial at < $0.5m), rocket (say $30-40m of which first stage is 3/4) and recurring costs like employee time, refurbishment, test fires, barge rental, range costs etc (significant maybe 5-10m?). Musk is prone to talking about the far future as if it were tomorrow and within our grasp today. If you count medium term as 3-5 years (I'd call that short term), there is no way they're getting an order of magnitude saving.

They charge $60m, so it's unlikely ever to come down below 20m without 2nd stage reuse, and say around 5-10m even with full re-use in a few decades. Best case they could probably get it down to 10% of current costs (90% saving) if they manage full re-use and cut down on recurring costs a lot, but for now 30% is pretty impressive.

> 30% doesn't seem very impressive

If one launch provider can send you up for $40M instead of $60M for the others, would you ever go with the others?

Suddenly SpaceX owns the launch business.

Except when their launch manifest is so full that they struggle to fit every customer in there. And I guess for some customers getting your satellite operational a few months earlier is worth more than 20 million.

Remember in the current Falcon 9 design, they are only reusing the first stage -- reported to account for 70% of the cost of the rocket (which is of course different to the retail price of launch service), and attempting to recover and reuse the fairing, an aluminum honeycomb core + carbon fibre sheet enclosure the size of a city bus, which is thought to add a couple million dollars per rocket including capital costs (SpaceX is thought to have limited capacity to produce fairings at a high rate, which is why they're chasing reuse).

They still need to rebuild the entire second stage each launch, and continue to pay the salaries of 4,000+ employees.

If the end-to-end launch service is priced at $60 million, 70% is $42 million, with the other 30% ($18 million) that needs to be paid each launch. Assuming the cost of all re-use is 100% free (gas and go), a full passing on of the savings would mean the second launch (which has a free first stage) could be priced at $18m + ($42m/2) = $39 million.

That's a 35% discount off $60 million. SpaceX haven't proven that reflying a returned booster is safe and reliable. It will take many relaunches to gain statistical knowledge of safety of the fleet they're building.

If SpaceX can reliably relaunch the first stage 5-10 times with minimal refurbishment costs, the amortized costs drop dramatically. During the development of the Merlin 1, testing aimed for 10 full duration (3 minute) test fires. I can see SpaceX aiming for 5-10 flights per booster with the current iteration of Falcon 9 over the longer term.

I encourage anybody interested to play around with this spreadsheet [1]. If the current design can be proven to have say 5 launches per Falcon 9 booster, that's a 65% saving to SpaceX. Falcon 9 is already the cheapest vehicle in its class (though some providers are cost competitive if doing dual launches on say, an Ariane V). The Russia's Proton rockets were reasonably cost competitive, but their reliability has proven to be very low in recent times.

As Amdahl's Law notes, as the number of reliable relaunches per rocket with minimal refurbishment costs increases towards infinity, the total cost will asymptotically approach the currently non-reusable portion of the costs (so in the current design it's the second stage, launch operations, fuel, fairings etc)

In a few decades, SpaceX wants to get airplane like re-use (fully re-usable with thousands of flights per vehicle lifetime), where each passenger pays a marginal cost of roughly the jet fuel cost and inspections and refurbishments don't happen every single flight but at set intervals. That's a probably several design generations away though (human Mars landing will certainly happen first)

[1] https://docs.google.com/spreadsheets/d/144Y_OVmFFYTh_zTiV-FH...

> SpaceX is thought to have limited capacity to produce fairings at a high rate, which is why they're chasing reuse

Is there an easy explanation for why fairings are so hard to make? In comparison to rocket engines, their function seems dead simple.

They're huge, they need to be light, and they need to protect extremely delicate cargo from hypersonic speeds.

> If the end-to-end launch service is priced at $60 million, 70% is $42 million, with the other 30% ($18 million) that needs to be paid each launch. Assuming the cost of all re-use is 100% free (gas and go), a full passing on of the savings would mean the second launch (which has a free first stage) could be priced at $18m + ($42m/2) = $39 million.

Oops, I mixed up two seperate points and can no longer edit the comment: I should clarify this math is for selling re-usable launches from scratch. Assuming two (and only two) launches per first stage with zero dollar refurbishment, SpaceX can sell two launches at $39 million and achieve the same profit, a 35% discount to customer. This is what will happen in the longer term: there may not be any full priced $60 million flights, so even the first flight of a booster will be re-usable pricing.

That said, currently we're in a weird place where existing customers are paying the full price ($60 million) for a freshly manufactured rocket, but subsequent re-use customers technically need only pay $18 million. While SpaceX could give a giant discount to all secondary customers this is not a long term pricing strategy because it requires a prior customer to "pay off" the first stage with a fully priced launch, which won't happen in the future. (SpaceX likely eventually needs to price closer to the amortized value for all customers -- even the first, if they want to achieve their goals of reducing prices, gaining more of the existing launch market and increasing demand).

There is no reason for SpaceX to reduce launch costs for customers who insist on freshly minted launchers.

Charge the sustainable rate for all launches, except those who demand new rockets.

Eventually customers will stop demanding new rockets.

Imagine the cost of the drone ship, the landing system and the logistics of recovery - I suspect that's the reason it's only a 30% reduction.

Most of those are once-off costs though. They may be expensive but I doubt they're all that expensive relative to the cost of the rocket.

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