How Does SpaceX Make Money?
Building and launching rockets is one of the most expensive industries in the world. While companies like SpaceX are trying to change this, it is by no means a quick or affordable journey. This has to do with many factors including production, materials, complications, and much more. This can help bring up the question of how exactly a company like SpaceX makes money.
SpaceX makes money through multiple different sources. Some of the main ways include launch services, NASA, investors, and future projects such as Starlink. Each of these sources helps provide the billions of dollars needed to consistently work on and launch developed and developing rockets.
SpaceX is not only consistently launching Falcon 9 but is also in the middle of Starship development. Both of these need a constant stream of funding to keep the work going. The process of developing a rocket alone costs a fortune. SpaceX is constantly testing, exploding, and building new Starship prototypes. This is exactly why they need so much money.
What Does SpaceX Spend Money On?
There are a lot of different things SpaceX spends money on. All of which are very expensive and consistently need funding. One of the first big expenses is rocket development. Right now SpaceX is in the middle of developing its next-generation rocket Starship. Standing at 120m tall and 9m wide it is a massive launch vehicle. The large size however only adds more to the overall cost. No matter how big a rocket is it costs a lot to develop. One of the first expenses is the testing process. So far SpaceX has done multiple static fires, cryo tests, 150m hops, 10km flights, and an upcoming orbital test flight. A difficult part about these tests is the failures. SpaceX has blown up many Starship prototypes up to this point.
Since the start of Starship development, they have built many prototypes and are currently using SN20. Each of these is expensive especially when you add more and more Raptor engines to the rocket. The upcoming orbital test will be very expensive since it’s the first full Starship launch. SpaceX also spends a lot of money on the Falcon 9. The Falcon 9 costs around $60 million per launch. This can add up when SpaceX continues to launch Starlink satellites. The company also has to spend a lot of money on propellants, rocket refurbishment, employees, and much more. All of these different factors add up and cost the private space company a lot of money to operate every day.
What Are Some Of The Ways SpaceX Makes Money?
Launch Services – One of the first ways SpaceX consistently makes money is through launch services. SpaceX operates the Falcon 9 and Falcon Heavy rocket. They use these rockets to launch different things including Starlink satellites, different companies cargo, or even humans. Here I want to focus on launching cargo for other companies. There is a massive market in the space industry for launch providers. A lot of different companies around the country and world have technology that they want to put in orbit and need a ride up. This is where SpaceX and primarily the Falcon 9 come into play.
The different companies will purchase a spot on top of the Falcon 9 and get their cargo sent into orbit. This is one of the main ways SpaceX makes money. To maximize on profit and space taken up, SpaceX often uses a rideshare program. The Falcon 9 has a large fairing and carrying capacity to low Earth orbit. Most companies and agencies don’t need all that space for their cargo. Instead, SpaceX will get a large group of different satellites from different companies and agencies and launch it all at once. There are a few downsides but it helps lower the cost for the people purchasing a spot and increase the amount of money SpaceX can make.
NASA – Another big source of income is NASA. There are two main ways that SpaceX makes money from this government agency. One is NASA buying seats for astronauts and the other is different funding and contracts. Currently, NASA does not have a rocket that can put astronauts into space and dock with the ISS. At the same time, the agency is constantly in need of bringing new astronauts up to the space station and other astronauts back down to Earth. For about the last decade NASA relied on Russia to do this for them. Fortunately for the large agency SpaceX developed the Falcon 9 rocket. Now NASA specifically uses the Falcon 9 and Dragon Capsule to launch astronauts. Each time they buy a seat for an astronaut SpaceX gets paid. So far there have already been multiple crewed missions and are planned to be many more in the future.
Another big way SpaceX has made money from the help of NASA is through contracts and funding. Here the agency will provide a large amount of funding to help SpaceX afford the development of new technology. NASA does this to help lower costs for them in the future. More specifically NASA will often have multiple companies compete and the agency ends up picking the best option. An example of this could be the Commercial Crew Program. Here NASA funded both Boeing and SpaceX to develop a human-rated spacecraft. Over time SpaceX used this money to create the Dragon Capsule which is now NASA’s main vehicle for astronaut transportation. Another example could be the more recent lunar lander competition. Here NASA picked SpaceX out of three groups and awarded them $2.9 billion. Over time this money has added up and helped SpaceX with its many costs.
Investors – The final source of funding I wanted to mention is different investors. There are people or groups that early on or more recently invested a significant amount of money into the company. These investors were especially needed in the early days of SpaceX. When SpaceX started testing their Falcon 1 rocket there were a lot of problems. The company was very low on money and the Falcon 1 had multiple failed launches in a row. Prior to these launches and especially after investors were crucial for providing capital to the company. On SpaceX’s fourth Falcon 1 launch it was finally successful. This caused a significant amount of additional investment and confidence in the company.
SpaceX’s Future Money Making Plans
SpaceX is making a decent amount of money right now but they have far more ambitious plans for the future. Over the last few years, SpaceX has been launching Starlink satellites. Starlink is a large array of low Earth orbit satellites meant to provide fast internet around the world. Currently, SpaceX only has around 2000 satellites in orbit. In the future, they are planning to have over 40,000. Once complete Starlink will provide an immense amount of funding. The market around the world for fast and affordable internet is massive. SpaceX still has tens of thousands of satellites they need to launch first. They are planning on using Starship to launch around 400 satellites every launch. This could accelerate the process and help lower costs. If successful Starlink will make enough money to fund the craziest of SpaceX’s goals.
Conclusion
Everything in the space industry is extremely expensive. Specifically, companies like SpaceX need a lot of funding to keep up work at their pace. To ensure that SpaceX can continue working they have multiple ways of making money. Some of the main ways include launch services, NASA, and different investors. All of which help pay for the constant expenses. With future plans of a worldwide internet service, SpaceX could see a lot more funding in the future. As time goes on we will have to wait and see what SpaceX does and how they end up making money.
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