Why don't we have SSTO's already?

[magnemoe]

$50 million was the 2013 price. The current listed launch price is $61 million: http://www.spacex.com/about/capabilities

Yes SpaceX fanboys, the price has gone up! Inflation, infrastructure, marketing and a full flight manifest are to blame.

If reusing the first stage scrapes more than 15% off the listed price, I'll be impressed.

This depend on the number of launches, you have fixed costs, workforce and infrastructure who don't scale much with number launched, then you have the extra cost to launch and the rocket itself, reuse only reduce the last part.

If they have few launches the cost of each launch goes up, this reflect the increased price as they has not done as much as they hoped.

Ignoring capital costs and research as its sunken costs and don't affect future missions. You have fixed cost+ number of launches * (launch + rocket cost)

Image get more complicated because not all launches will have reusable first stages, they will probably use parts from reused first stages here.

Reusable first stages has the effect of decreasing part count but not sure how huge impact this have as its not mass produced anyway, in fact it looks like stage production is an bottleneck in this case reused first stages will let them fly more missions.

Their pricing will anyway be the one who brings most profit over time, price difference between an smaller payload and an larger one who require the first stage to be discarded will tell more.

[Kryten]

@Kryten: I don't get why you don't see where the savings are.

Let's say it's cost $45 million(75% of the launch cost). It'll be less than that, because of profit and what not.

You've got a 1st stage which you reuse 6 times. Dividing the cost by 6 and the 1st stage cost changes to $750,000 per launch.

Add that to the remaining stages cost and you'll get a rocket launch which will cost $16,750,000.

Of course that would be in a perfect world where the 1st stage doesn't need to be rechecked and fixed.

But I doubt it would add an other $5 million to the cost.

How are you supposed to be saving this $75 million in the first place when you still have to pay the idle rocket production workers? They're not saving on components to a significant degree because they have very few external component providers, and materials cost are not going to be remotely that high.

[Nibb31]

@Kryten: I don't get why you don't see where the savings are.

Let's say it's cost $45 million(75% of the launch cost). It'll be less than that, because of profit and what not.

You've got a 1st stage which you reuse 6 times. Dividing the cost by 6 and the 1st stage cost changes to $750,000 per launch.

Add that to the remaining stages cost and you'll get a rocket launch which will cost $16,750,000.

Of course that would be in a perfect world where the 1st stage doesn't need to be rechecked and fixed.

But I doubt it would add an other $5 million to the cost.

First of all, launch cost is not launch price. If SpaceX is selling launches at $61 million, I certainly hope it doesn't cost them that. Musk is an entrepreneur, so he should be making a decent margin even with that price.

Next, I'd like to find the actual quote for that "75%" number. 75% of the cost of the rocket is not 75% of the cost of a launch, because the actual rocket hardware is only a small part of the operational cost of launching a rocket.

Then we'd need to know what that 75% represents. Does it include manufacturing costs, material, development costs, propellant costs, testing, transportation, handling, stacking... ? If you reuse your first stage, you don't save all of those costs. You still need to pay for the development, the propellant, the transportation, handling, storage, integration, tooling and fixtures, etc... You still need to pay a few hundred workers to do all those jobs.

You do lay off some of the manufacturing workforce. But much of the manufacturing cost is fixed: facilities, maintenance, administration, infrastructure, tooling, fixtures. This means that if SpaceX reuses each first stage 10 times, they need to build 10 times less first stages. Instead of producing 400 Merlin engines every year (which is what their factory is scaled to produce), they only make 40. This all means that the unit cost of each first stage increases significantly, in addition to the extra hardware (structural reinforcements, grid fins, legs, avionics) that adds to the cost of the reusable stage.

In the end, the only actual saving might be the cost of the material and some of the workforce that they use to build the rocket. They definitely don't save 75% on each launch. Optimistically, they might save 50% on the cost of each rocket. If the actual rocket hardware represents 20% of the launch price, then reusability cuts a whopping 10% reduction in launch prices for customers, which in turn is only a fraction of the total cost of operating a satellite.

[Albert VDS]

As far as I know the material part of the rocket and putting those materials together are the bulk of the cost.

[Nibb31]

As far as I know the material part of the rocket and putting those materials together are the bulk of the cost.

I found Elon's quote here: http://www.spaceflightnow.com/falcon9/009/140430firststage/#.VJG8yHsV9Zg

"The boost stage is roughly 70 percent the cost of a launch, so if we're able to reuse it and refly it with minimal work between flights and customers are comfortable with that -- and it might take a few years for customers to get comfortable with that -- then obviously there's as much as possibly a 70 percent reduction from where things are today," Musk said.

Well, I guess I disagree with Elon.

If the first stage is 70% of the launch price, then that's over $40 million just for a first stage booster. The infrastructure, R&D, administration, transportation, logistics, facilities, workforce, mission control, etc... plus the upperstage and the payload integration are only one third of the launch? Nope, sorry, I don't buy those numbers.

[Frozen_Heart]

Nope, sorry, I don't buy those numbers.

I guess only time will tell if they are accurate or not...

[magnemoe]

I found Elon's quote here: http://www.spaceflightnow.com/falcon9/009/140430firststage/#.VJG8yHsV9Zg

Well, I guess I disagree with Elon.

If the first stage is 70% of the launch price, then that's over $40 million just for a first stage booster. The infrastructure, R&D, administration, transportation, logistics, facilities, workforce, mission control, etc... plus the upperstage and the payload integration are only one third of the launch? Nope, sorry, I don't buy those numbers.

Lets break it down, first stage use 9 times as many engines and is larger, much of the support hardware is the same but second stage need to have more for operation in space.

Say first stage is 85% of hardware cost, leaving 15% for fixed launch costs, SpaceX run an slim organisation here, so 10 million is plausible.

Launch cost does not include fixed overhead like administration, infrastructure or R&D you have to pay anyway.

Its kind of asking yourself how much it cost to drive a truck 10 km, it cost the fuel and the wear on the truck and the salary for the driver. Now you will bill for the rent of the truck and administrative costs and an profit.

[Kryten]

Launch cost does not include fixed overhead like administration, infrastructure or R&D you have to pay anyway.

He's talking about price, not cost.

[Nibb31]

Its kind of asking yourself how much it cost to drive a truck 10 km, it cost the fuel and the wear on the truck and the salary for the driver. Now you will bill for the rent of the truck and administrative costs and an profit.

What counts is what the customer pays to transport his container from A to B (or his satellite from the ground to orbit).

The trucking company might be able to get a 50% discount on a new truck, but that won't translate into a 50% lower price for the customer, because the truck is only a small part of that price. Costs also include the salary and expenses of the driver, fuel, parking, loading and unloading the truck, the salaries of the boss and other employees, offices, maintenance, advertising, etc... In the end, the vehicle is only a small portion of what the customer actually pays.

The biggest operating cost of most companies is usually the workforce, rarely the equipment. Reusing stages only reduces salaries in the manufacturing sector. The rest of the company still operates with the same workforce and the same infrastructure.

Musk's "70%" quote is disingenuous because it maintains the confusion between cost and price. There is no way reusing first stages can cut $40 million off of a $60 million price tag.

Edited December 17, 2014 by Nibb31

[Ziff]

Musk's "70%" quote is disingenuous because it maintains the confusion between cost and price. There is no way reusing first stages can cut $40 million off of a $60 million price tag.

The price/cost thing is always confusing to me because I never trust that the other guy is using it right. It stands to reason that in that quote his is referring to his cost per launch, not the pricetag.

He also was kind of vague. He actually said "then obviously there's as much as possibly a 70 percent reduction from where things are today,"

"As much as" is like saying "up to 70%". It could be only 20%, but it can't be more than 70%. So I took it to mean that if the booster stage is 70% of the launch and that part is reusable, then the cost savings are anywhere from $0 up to $40 million.

[magnemoe]

What counts is what the customer pays to transport his container from A to B (or his satellite from the ground to orbit).

The trucking company might be able to get a 50% discount on a new truck, but that won't translate into a 50% lower price for the customer, because the truck is only a small part of that price. Costs also include the salary and expenses of the driver, fuel, parking, loading and unloading the truck, the salaries of the boss and other employees, offices, maintenance, advertising, etc... In the end, the vehicle is only a small portion of what the customer actually pays.

The biggest operating cost of most companies is usually the workforce, rarely the equipment. Reusing stages only reduces salaries in the manufacturing sector. The rest of the company still operates with the same workforce and the same infrastructure.

Musk's "70%" quote is disingenuous because it maintains the confusion between cost and price. There is no way reusing first stages can cut $40 million off of a $60 million price tag.

Yes, however for me it was pretty obvious he was talking cost, and then only the launch cost.

They will set the price where they get most income as everybody else,

One interesting question however is if SpaceX has an backlog of rockets? They are still behind on launches as far as I know.

[NERVAfan]

Musk's "70%" quote is disingenuous because it maintains the confusion between cost and price. There is no way reusing first stages can cut $40 million off of a $60 million price tag.

I don't think there's any confusion. He said 70% of the cost. So assuming a constant profit margin, they could lower the price that much if all savings were directly translated into lowering the launch price.

[NERVAfan]

I don't see why that price is so impossible, either.

I don't believe it's mostly labor costs, because if it were, Russia and India would be launching F9-sized rockets for under $10 million, since their labor costs are something like an order of magnitude lower than SpaceX's (especially as SpaceX is in one of the more expensive cost-of-living parts of the US). Yet they clearly are not.

Also, once they get up to full launch cadence (quite possibly next year) the labor costs for F9 could be pretty low.

[PakledHostage]

I don't believe it's mostly labor costs, because if it were, Russia and India would be launching F9-sized rockets for under $10 million, since their labor costs are something like an order of magnitude lower than SpaceX's (especially as SpaceX is in one of the more expensive cost-of-living parts of the US). Yet they clearly are not.

Perhaps they are charging what the market will bear? Why should they sell launch services for $10 million when customers are willing to pay close to ten times that?

[Nibb31]

I don't see why that price is so impossible, either.

I don't believe it's mostly labor costs, because if it were, Russia and India would be launching F9-sized rockets for under $10 million, since their labor costs are something like an order of magnitude lower than SpaceX's (especially as SpaceX is in one of the more expensive cost-of-living parts of the US). Yet they clearly are not.

SpaceX is a lean machine. They probably employ an order of magnitude less people than Russia and India in their respective space programs, which compensates. The low cost of labor in these countries explains why they are still competitive on the market. On the other hand, Russian low wages are compensated by antiquated hardware and infrastructure, poor quality control, and ancient manufacturing process that are probably costly to maintain.

SpaceX has reduced labor cost by streamlined processes and vertical integration, which is smart, and which explains why they are so much cheaper than ULA or Arianespace. It's going to be hard to streamline the company any more than they are, and SpaceX's 3000 highly-qualified employees are still its major operational cost.

Also, once they get up to full launch cadence (quite possibly next year) the labor costs for F9 could be pretty low.

Agreed. Launch volume is where the savings lie, not in reusing stages. Launch volume translates directly into production volume, lower prices from suppliers, diluted fixed costs, and lower unit costs. Reusability is spectacular and a fantastic technological achievement, but it actually works against those volume savings.

Edited December 18, 2014 by Nibb31