Musk Just Crushed SpaceX
Yet again, Elon has shot himself in the foot.
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?
Well, right now, the viability of Starship is seriously in question. After nine test flights and nearly $10 billion in development (with nearly $3 billion of that coming from NASA), Starship has yet to reach any significant milestones. It could be years and another $10 billion in development before Starship even approaches the capability of a lunar lander. Also, even after development, the cost of a Starship launch to the lunar surface will be similar to that of NASA’s own SLS rocket (read more here), which has already proven it can reach the moon. So, even before this Musk-Trump spat, NASA had serious internal concerns that SpaceX couldn’t deliver the Starship-derived HLS (human landing system) on time or on budget.
This is where Blue Origin’s New Glenn rocket and the Blue Moon lander come in. Unlike Starship, New Glenn reached orbit on its first-ever test flight and effectively delivered its 20-tonne dummy payload to orbit. New Glenn is designed as a partially reusable rocket, with the first stage landing using retrorockets, just like the Falcon 9, to reduce launch costs. However, it has double the payload to orbit of the Falcon 9 and can carry the Blue Moon lander and its crew to the lunar surface. Sadly, on this first test flight, this stage failed to land. However, that wasn’t the mission objective. The mission-critical aspect was to actually reach orbit (which someone should tell Musk). In fact, reaching orbit means Blue Origin is on target to land its Blue Moon lander on the moon in 2030 for the Artemis V mission.
So, no, the Artemis missions don’t rely on SpaceX, and if NASA works with Blue Origin to speed up New Glenn and Blue Moon development, then they could conduct the earlier Artemis III and IV crewed missions with Blue Origin and not with SpaceX’s yet-to-be-delivered HSL, as was planned.
Also, Blue Origin could go much further than just Artemis. New Glenn is expected to cost $68 million per launch and have a payload of 45 tonnes to LEO (Low Earth Orbit), giving it a cost per kilogramme to LEO of $1,511. SpaceX’s Falcon 9, which NASA currently uses to launch most of its satellites, costs $70 million per launch and has a LEO capacity of 22,800 kilogrammes, making it twice as expensive as New Glenn at $3,070 per kilogramme to LEO. New Glenn is also set to enter commercial operations next year, and its first customer is NASA, launching their ESCAPADE (Escape and Plasma Acceleration and Dynamics Explorers) satellite. So, even without Musk shooting himself in the foot and NASA desperately seeking alternatives, Blue Origin was set to take a serious portion of the US launch market away from SpaceX, simply because they could offer a better product than their Falcon 9.
Corruption?
Okay, so there are rivals ready and capable of pouncing on SpaceX’s contracts over the coming year or two. But that isn’t the biggest blow here. You see, SpaceX didn’t just grow into a veritable monopoly because their rockets were good, but because they had what looked like a corrupt relationship with NASA.
I have written about this topic before (read more here), but take Kathy Leuders as an example. When she worked for NASA, she had the final say in who got the nearly $3 billion lunar lander contract for Artemis and awarded it to SpaceX for “budget reasons” (because Musk blatantly overpromised Starship development costs). Then, soon after, she quit NASA and got a cushy job working high up in SpaceX, as well as gained equity in SpaceX — which seems like a somewhat obvious case of corruption. But this kind of practice goes back much further than Kathy Leuders and is one of the main reasons why SpaceX has received more than 50% of NASA’s private investment and contracts over the years, starving the rest of the private space launch industry of investment.
Furthermore, Musk was planning to take this co-dependent corruption to a whole new level with his choice for NASA lead, Jared Isaacman. This billionaire has not only paid SpaceX for his own private crewed missions to space but has also invested substantially in SpaceX to the tune of several hundred million dollars. With him in charge, who do you think would get all of NASA’s development funds?
Trump threw out Isaacman’s NASA nomination, partly because of his ties to SpaceX. When something is too corrupt for Trump, you know it’s bad. This alone was a massive blow to SpaceX, but the fact that, for the first time in two decades, NASA is actually trying to diversify and move away from SpaceX, rather than cosy up to them, marks a massive shift in their partnership. SpaceX is only as powerful as it is because NASA happily prioritised SpaceX for years. With that support being taken away, it’s not hyperbolic to say it could stall SpaceX’s development.
So, that is how Musk’s huge political hissy fit might have just flushed SpaceX’s entire vision of the future down the toilet and handed the space flight market to his arch nemesis, Bezos. It’s almost like acting like a big man-child isn’t a good business move.
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Sources: Political Wire, NY Times, Space News, BO, BO, BO, Space News, Americaspace, Will Lockett, Paymentsdrive, Sacra, Will Lockett, Will Lockett, NASA, GOC, CNN, Space Explored, NASDAQ, AInvest, Breaking Defence, Space Insider
Great analysis as always Will!!
Hands up to anyone who wants to climb aboard a Starship. All the free Kool-aid you can drink!