This might also be another way how Elon can keep financing Tesla. SpaceX has in the past bought bonds of SolarCity, with this new cash perhaps SpaceX can buy some Tesla bonds to save it from running out of cash this year.
[0] https://techcrunch.com/2018/03/16/spacex-is-making-big-money...
I'm not even certain that would make it past underwriting, much less be legal. Otherwise you could leverage market capitalization without amy downward sell pressure to increase not only your total holdings but it's overall value. Seems illegal.
Kinda like EOS.
Anyone who saw the SpaceX falcon heavy launch should have got the message that SpaceX and Tesla are BFFs.
Starlink, SpaceX's satellite constellation, is the cash crop.
Source is from the 2016 International Astronautical Congress talk in Mexico [1]:
> And I should say also that the main reason I'm personally accumulating assets is in order to fund this. So I really don't have any other motivation for personally accumulating assets, except to be able to make the biggest contribution I can to making life multiplanetary
[1] http://shitelonsays.com/transcript/making-humans-a-multiplan...
Kinda why I'm happy NASA still has their own plans, and other competitors are out there too. Hinging everything on one rocket isn't a good idea, and when the shuttle was retired, we ended up without a way to space for years.
Also, NASA can't do any of this, which is why the US government is giving funds to SpaceX. Plus what about the real dependency of the NASA on political agenda and budget votes?
Elon Musk is very good at designing companies built on government handouts. ;) Not that there's anything inherently wrong with that.
We are past the "pioneer" stage of space launches: We've done it lots of times. The exciting part is now making space launches cheaper, regular, and more capable. SpaceX is not the only company working on doing those things.
Sure. But SpaceX is still leading a way, and is way ahead of everyone else. And before they started, literally nobody else cared. Existing launch companies were happy with their status quo. I'm not confident that the other companies currently working on cheap launches would survive if SpaceX folded, so I still believe we need SpaceX in the coming years to keep up the momentum.
SpaceX absolutely does not depend on NASA for funding. The majority of SpaceX missions are not for the government. The majority of their developments and research are not directly funded by NASA.
> Congress can absolutely decide to fund SpaceX less
They can hurt them by telling NASA and DoD to not use SpaceX even if they are the cheapest. But that would absolutely not kill SpaceX in any way.
It would also massively hurt the government since it would cost them billions.
> or charge SpaceX more for use of government facilities
Unless they break their contract that were already negotiated for the long term, no they can't. But that's a stupid argument, of course the US government can destroy any company in the world if they really want to.
> Elon Musk is very good at designing companies built on government handouts. ;) Not that there's anything inherently wrong with that.
Not really. First of all, in the case of SpaceX they were not handouts, but rather competitively bid contracts that SpaceX can execute cheaper then anybody else. In fact SpaceX had to sue the government multiple times to even be allowed to bid for some of the contracts.
Kistler for example was not able to execute and NASA cut their funding and they went down.
These actions actually saved the government a shit-ton of money, rather then the government giving handouts to SpaceX.
The same goes for Tesla, its mostly successful because it a good product. The tax cuts they get are nice, but again, any other company has access to the same tax-cuts as well.
> We are past the "pioneer" stage of space launches
The BFR is absolutely a pineer project.Pretty much nothing like it has ever been done. Not the engines. Not the structure. Not the fuel. Not the orbital refueling. Not the full reusability.
And of course then landing it on Mars and hopefully flying it back, that's absolutely a pioneer project.
Which, for what it's worth, SpaceX still hasn't actually delivered a result on, since they decided not to make the Dragon a crewed spacecraft after all.
First of all, the argument that SpaceX would not exist without that contract is 100% wrong. When it was awarded they already had a successful comercial buissness with many people having order launches.
Second, you seem to be under the delusion that SpaceX was given this money. That is false, the money is conditional on reaching milestones and is only paid out if NASA is sadified. If NASA is not sadified the company has to pay for the delays out of their profit margin, unlike JWST for example. SpaceX has not jet recived the waste majority of that money.
Third, the 3 billion is by FAR the cheapest offer NASA had. You can see in your own link that SpaceX gets 2.6 billion while Boeing gets 4.2 billon for the operational phase. The DreamCheaser was around 3.6.
So what do you want? Do you want NASA to build everything themselfs? NASA itself admits that they could not develop something nearly as cheap. Their own evaluations have ahown this over and over again.
Are you just against spaceflight in general? Do you think the government should not be invovlved?
The document you yourself provided showes that SpaceX got the contract because they convinced NASA in a highly technical highy comptetive.
So whats your issue? Why this irrational hate?
In either case you should stop going into technical forums and write strongly worded comments like:
> Uh, most of SpaceX wouldn't exist without the $3.144 billion SpaceX was given under the Commercial Crew Program
Secondly
> Why the irrational fanboyism?
How is it irrational? I'm a 'fanboy' because of what SpcaeX has achived. I'm a fanboy for any company that pushes technology and SpaceX just happens to be one of the most visionary and aggressive companies around.
> Why are you taking a realistic discussion of the company like a shot across the bow?
I'm all for realistic discussion. If you had argued that SpaceX would not exists without NASA or the governmnet (2008 COTS contract), then I would have responded differently. But you did not make realistic discussions, you asserted things that were false.
There is a realistic discussion about SpaceX and the profitiabiltiy of its vision. And I'm happy to talk about that, because it is a difficult thing. Being a 'fanboy' does not preclude realism.
All I did was give you the facts to correct your mistake. Don't be salty.
As others have noted, you really don't know what you're talking about.
https://www.nasaspaceflight.com/2018/04/spacex-progress-comm...
NASA, with its limited budget and constant micromanagement by politicians, doesn't want to be - and can't be - in the business of trucking things to orbit. That's why they're trying to outsource it as much as possible.
This is just a list of benefits that humans have gotten from space travel. Space travel in general is, in fact, beneficial to humanity and science.
The way this works: space exploration presents a set of compelling engineering challenges that extend our capabilities. People solve those challenges, and then other people find more mundane uses for resulting solution. But without the initial compelling challenge, those inventions would likely either took much longer, or would not have been made at all, because ones on the market were good enough.
And that's just talking about trickle-down benefits. Then there's the whole lot of direct benefits from satellites - from the most obvious, like navigation and communication, to the less obvious, like weather monitoring, agriculture management, emergency response, national security, climate science, etc.
Tesla will do a minimum of a $2 billion funding raise whenever they need to next. They're claiming they won't need to do a funding raise this year (we'll see).
The SpaceX capital would be far more likely purposed to help pay for BFR & Starlink.
edit: downvoters want to clarify what's wrong with what I said? It's extraordinarily obvious the $507 million raised by SpaceX isn't going to bailout Tesla. Mathematically it couldn't even if they wanted to put it to that use.
Increased valuations give him a much larger ability to draw on third-party loans to dump into whatever business he likes: the risk being if his investments don't pay off, he risks losing control of SpaceX.
[1] https://www.economist.com/news/business/21709061-entrepreneu...
(EDIT: I was agreeing with you on the details, but also pointing out that there are effects here beyond the money directly raise that could help Tesla.)
Additionally - I don't know where price-wise Musk gets margin called on his Tesla stock, but I do think him borrowing against it is a significant risk for Tesla. In my personal opinion, Tesla's biggest asset is Musk's fan base - I think it would really significantly impact Tesla if Musk got margin called and couldn't (or doesn't) cover and lost his status as the largest shareholder of Tesla. I think he would lose more interest in the company and you risk his fans no longer seeing Tesla as "his" company.
I don't think I'm alone in this opinion either, Musk has borrowed enough against his shares to warrant getting margin called mention as a risk in the 10-K. (Not to say its wrong for him to borrow against them, I'm sure I would do the same - I just think doing it to fund a private company he is heavily involved in (and distracts him from his public company) links them financially in a way I would personally not be comfortable with if I were an investor in Tesla).
[0] https://electrek.co/2017/04/14/tesla-solar-bonds-elon-musk-s...
What was paid back were "Solar bonds", which were not SolarCity bonds.
I can see why you would think that though - the PR around that only mentioned what they were paying early, not what was being inherited. (I think by design, but I have a cynical view of Tesla's relationship with the truth so that's only an opinion).
[0] http://fortune.com/2015/08/07/this-is-why-elon-musks-spacex-...
What margin? They are losing upwards of $20,000 per car produced, and as of Q3, it's growing.
Sure, if you use their non-GAAP gross margin figures, which remove many costs that other auto manufacturers include, things look downright swell; non-GAAP accounting artifacts can do all kinds of things. But at the end of the day Tesla are burning cash at an increasing rate, even with production and deliveries increasing (around 100k cars per year). Where are all these profits from scale to come from?
Perhaps the 19% "Gross margin total automotive & services and other segment" margin they disclosed on page 51 of their latest 10-K filing?[1] Or the 23% "Gross margin total automotive"?
Taking the smaller number, Tesla made $24,741 per vehicle (and yes, that's the correct sig figs).
> Sure, if you use their non-GAAP gross margin figures...
Tesla hasn't reported non-GAAP figures since 2016.[2] Search the filing yourself: the word "GAAP" appears only eight times, and none of those refer to any non-GAAP accounting.
[1] http://ir.tesla.com/secfiling.cfm?filingID=1564590-18-2956&C...
[2] https://www.accountingtoday.com/news/tesla-backs-away-from-n...
https://seekingalpha.com/article/4153659-just-say-no-teslas-...
To summarize: 1. Tesla’s Calculation Ignores The Cost Of Its Service Center Network 2. Tesla Excludes Its R&D From Its Calculation 3. Tesla Allocates Some Supercharger Costs To SG&A 4. Expensing Of Warranty Costs 5. Front-Loading Of Gross Margin
You'd have to read the details on what each means or implies.
1. Tesla doesn't ignore it (the very next line is "Total automotive & services and other segment"), plus the author completely ignores service revenue which pays 81% of those costs
2. True, but Ford is stable and spends 4% of revenue while Tesla is growing and spends 12%
3. No they don't, Supercharger costs are all under "Cost of automotive sales revenue" on pp51
4. True, but this is tiny
5. Again, this is covered under "Total automotive & services and other segment" on the very next line, and again that bin necessarily includes additional revenue, not just additional costs as this author pretends (apparently 'forgetting' that car dealerships make money??).
The author's "adjusted" 2017 numbers arbitrarily chop 964m off revenue to "correct" for Tesla running its own service centers, but Tesla's service centers only incurred a net loss of 228m. The article is laughably inaccurate (presuming you don't hold a short position).
More FUD from the self-avowed Tesla shorts. Nothing more.