Musk Just Crushed SpaceX

Yet again, Elon has shot himself in the foot.

Photo by SpaceX on Unsplash

The Musk-Trump breakup is unfurling as beautifully and spectacularly as we could have hoped. But one thing I didn’t see coming was Musk shooting himself in the foot so hard. After Trump threatened to revoke all of SpaceX’s governmental contracts, which amount to nearly $22 billion, Musk decided to retaliate by saying he would decommission SpaceX’s Dragon capsule, the US’s only operational domestic route to the ISS — rather than, you know, just being critical of Trump. So, he took the already dire situation occurring at SpaceX and NASA and pummeled it even further into the mud. Now, NASA and the Pentagon have been concerned about their overreliance on SpaceX for years, and this pushed them over the edge. The Washington Post reported that in response to this, “NASA and Pentagon officials [have] moved swiftly this past week to urge competitors to Elon Musk’s SpaceX to more quickly develop alternative rockets and spacecraft”. This is far more crushing for SpaceX than you might think. Let me explain.

SpaceX’s income is currently precarious. In 2024, its revenue was $13.1 billion, according to multiple sources. However, $8.2 billion of that revenue was from Starlink. Starlink is currently far from profitable and is being paid for by its other profitable launches. In fact, because Starlink’s global sales are declining due to backlash against Musk and his misuse of Starlink, it is likely to remain unprofitable for a long time (read more here). As such, it only made $4.9 billion from external launch revenue. $3.8 billion of that came from government contracts from NASA and the Pentagon. So, 77.6% of SpaceX’s profitable operations came from the US government! As a result, if the US government diversified its launch options, it could literally decimate SpaceX’s operational profit.

But can SpaceX’s rivals really replace the services SpaceX provides to NASA? Well, yes, they could very soon.

The International Space Station

Take Boeing’s troublesome Starliner. It was intended to be a viable alternative to SpaceX’s Dragon capsule, thereby reducing the American ISS program’s reliance on SpaceX for crewed flights to the ISS. Sadly, the first crewed flight of Starliner was a near-total failure, effectively grounding Starliner ever since and raising serious concerns over Boeing’s internal processes. However, since then, NASA has collaborated with Boeing to resolve the issues with Starliner and is looking to launch it to the ISS again in early 2026. It’s not clear whether this will be a cargo or a crewed mission, but NASA is still pursuing Starliner as a human spaceflight vehicle. This all happened before NASA started encouraging rivals to “more quickly develop alternative rockets and spacecraft”. Because NASA is already significantly helping Boeing, it would make sense for them to expedite its development and deliver a fully fledged Dragon capsule alternative next year to secure the ISS programme.

So, while NASA can’t immediately replace the Dragon Capsule, it could very soon.

Satellite Launches

Okay, but what about a heavy launch vehicle for larger satellites and uncrewed missions? NASA needs SpaceX for that, right?

Truth be told, NASA doesn’t need a heavy launch vehicle. NASA’s heaviest recent launch, the lunar-orbiting 26-tonne Artemis 1, used its own SLS rocket. Missions of this size only happen every few years, so NASA doesn’t really need external help getting these larger missions into space.

All of their other satellite missions weigh well under ten tonnes and so are launched by rockets like the Falcon 9. But there are loads of alternatives to the Falcon 9, like the Atlas V. While the Atlas V is approximately 50% more expensive than the Falcon 9, the launch cost is only a small part of the cost of a satellite mission, typically around 33%, meaning that diversifying NASA’s satellite missions from SpaceX would be relatively cheap, quick and easy. And, as you will soon see, there are actually cheaper alternatives to the Falcon 9 coming very, very soon.

Artemis Missions

This brings me to NASA’s Artemis program. Doesn’t NASA depend on SpaceX’s Starship to land crews on the Moon affordably?