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Cost-competitiveness isn't about your total profit, or about whether your customers include governments. It's about how much it costs to launch a rocket.

> subsidies

e.g. the government giving them free money just so they can continue to exist? SpaceX does not survive on subsidies.

> contracts

Doing work in exchange for money? Yes, that's how SpaceX survives. That's the way any rocket company is supposed to survive, yet you're construing this as somehow a bad thing. Seems like a sad case of EDS.

They are spending money to make more money later.