SpaceX, an American Miracle

Slowly lifting off from the launch pad on Oct 13, 2024, with all 33 of its Raptor engines at full power, SpaceX’s Starship continued to break its own records. I tuned in that Sunday morning to witness SpaceX successfully catch the Super Heavy booster on the fifth flight of the world’s largest rocket, leaving NASA’s comparable rocket, the Space Launch System (SLS), which only launched once in 2022, in the dust. Then I held my breath as I watched the 100-ton starship reenter smoothly and land upright, although in the water. Among all of the other global competitors, including both companies and government space agencies, SpaceX stands out with the lowest costs, highest reusability, first private human space flight, and the development of the world’s largest rocket. SpaceX had 69 orbital launches in the first half of 2024 alone, equalling the number of launches of the entire world in 2008 1. I could go on and on about SpaceX’s achievements, but I hope you see the point by now.

On the other hand, the space industry has existed for well over half a century, and there haven’t been any groundbreaking technologies that fundamentally changed how we launch satellites recently. SpaceX doesn’t have any magic that other companies and countries don’t have, so how did it come to rise and dominate the market?

SpaceX was founded in 2002 from scratch with an ambitious timeline that gained immediate attention. The space shuttle, the previous generation of spacecraft, took around 13 years from the start of the project to the first flight 2, while NASA’s newest rocket, the Space Launch System (SLS), took 11 to develop 3. SpaceX originally set to fly its Dragon spacecraft to the ISS in 2009, less than seven years after the company’s founding, allocating even less time for development 4. Even though SpaceX missed its deadline by 3 years, an ambitious schedule continues to be a characteristic feature of the company alongside many other unique business practices that helped put it ahead of other agencies.

Most companies, when making a product, choose to save costs by purchasing premade parts and working with other companies. For example, ULA, a joint venture between Boeing and Lockheed Martin, the only other commercial launch provider before SpaceX, purchased Russian engines due to their reliability. But Elon Musk, the founder and CEO of SpaceX, recruited rocket engineers to design their own engines from the beginning of the company. In addition to having the audacity to start the company from scratch, Musk invested his personal savings into SpaceX. The company’s first milestone ended up being the Merlin and Kestrel engines, which eventually powered their first rocket, Falcon 1 5.

SpaceX opts to manufacture its own parts when possible, allowing for control over the schedule, quality, and cost. Even though the upfront cost is higher, it is much more preferable to have this controllability in the long term. As a result, SpaceX’s Falcon 1, Falcon 9, and Dragon are over 90% designed, manufactured, and tested by SpaceX 4.

Another example of cost savings is in the engines. The company realized that maintaining one type of engine costs less than maintaining the two types they developed, so it decided to only use the Merlin engines for both stages on the Falcon 9, further reducing operational and maintenance costs. SpaceX also simplified and optimized the design for better performance and fuel efficiency 4. Instances of careful optimization similar to the Merlin engine happen with all aspects of the company, such as the types of rockets. SpaceX has only ever offered three types of rockets: the Falcon 1, the Falcon 9, and the Falcon Heavy. After successfully developing the relatively small Falcon 1, which can put around 635 kilograms into low Earth orbit (LEO), the company made no pause and immediately started developing the larger Falcon 9 and Falcon Heavy. Falcon 9 and Falcon Heavy also share many parts—the Falcon Heavy is essentially three Falcon 9s strapped together. To simplify operations and cut costs, the Falcon 1 was quickly retired in 2009 after just five total flights 6.

SpaceX’s approach to rocket development is also drastically different compared to other space agencies. You have probably seen the videos of SpaceX boosters blowing up while attempting to land, creating massive fireballs. Some have argued that their private status allows them to adopt such an engineering process, speeding up their development. SpaceX iterated through 18 Falcon 9 rockets before successfully landing the first one, Booster 1019 7. On the other hand, there has only ever been one SLS rocket and one launch, which successfully orbited the moon and returned safely uncrewed in late 2022. NASA is a publicly funded agency and operates differently from companies, while SpaceX can launch whenever they feel like they are ready to test. Another reason actually comes back to cost. NASA’s SLS costs billions every launch while Falcon 9 launches are cheap enough for the company to test technology as it is developed. This allows the company to develop rockets even faster and, in turn, cheaper in the long run.

In addition to commercial aspects, a coincidence in the timing helped the company. After the Space Shuttle Columbia disaster in 2003, President George W. Bush announced the retirement of the Space Shuttle fleet by around 2010 8. With the Space Shuttle gone, there were no longer any American systems that could launch humans to space, and NASA had to pay Russia tens of millions of dollars per seat to the International Space Station. Not wanting to rely on other countries, NASA looked for replacements. Originally, NASA came up with the Constellation Program, but it ended up significantly under budget and behind schedule, leading to President Barack Obama canceling the program 9. Describing the Constellation Program as “lacking in innovation” 10, Obama instead encouraged NASA to outsource contracts to private firms to develop a launch system for sending humans to space through the Commercial Crew Program. SpaceX, among two other companies, Boeing and Sierra Nevada, won these contracts in 2014 from NASA each worth around $2 to $3 billion dollars. This came at just the right time for SpaceX as it needed funds to develop its Dragon spacecraft, which eventually became the first commercial vehicle to carry humans to space 11.

While from the outside it looked like SpaceX was outcompeting NASA, it’s easy to overlook the deep cooperation between NASA and the company. Not only did the agency provide substantial funding, SpaceX also worked closely with NASA throughout the development of the Dragon spacecraft under rigid NASA requirements. Even though the companies design the spacecraft and systems, NASA sets safety standards, ensures mission objectives are met, and oversees testing. SpaceX also collaborated with NASA to develop the heat shield for its Dragon spacecraft, as an example. It’s easy to compare NASA and SpaceX as opposite approaches, while in truth, NASA is actively supporting private space companies 11.

The previously mentioned decisions and business foresight allowed SpaceX to take advantage of cutting-edge technology, but the most obvious and significant cost savings came from its reusable technology. SpaceX’s claim to fame is arguably the landing and reuse of its rockets, which no one else had ever tried before.

Since the start, one of the company’s main goals was to build reusable rockets. Before, all rockets were single-use. They are discarded into the ocean or burned up in the atmosphere after launch. Overall, the booster and the payload fairing account for around 80% of the costs of a launch 12, but many companies and agencies dismissed landing and reusing rockets as impossible, at least with current technology. SpaceX started trying to land their rockets with their Falcon 1 and iterated through multiple methods, including parachuting and landing vertically with engines. Due to the uncertainty of the technology, SpaceX had to clarify that they were using their private funding and no NASA funding to develop reusable technology, demonstrating the general view against the technology and another factor as to why NASA couldn’t develop such a program 13. SpaceX spent over a billion dollars to develop reusable technology 14, and on December 22, 2015, after many launches and nine attempts, they finally landed a Falcon 9 rocket successfully 1516. Lots of new technology had to be developed, such as reignitable engines, hypersonic rocket control, and throttleable engines 15. In a video watched almost 30 million times, SpaceX shows a montage of its landing attempts 17.

After successfully landing boosters, SpaceX went on to recover fairings by catching them, which turned out to be less profitable than just picking them up after falling into the ocean 15. SpaceX’s human-rated spacecraft, Dragon, is also reusable 11. By reusing boosters and fairings, SpaceX significantly reduced their launch costs. One Falcon 9 costs $69.75 million and can deliver 17,000 kg to LEO, which results in a cost of slightly below $4,000 per kilogram 18. On the other hand, a Space Shuttle cost $450 million per launch and could deliver 27,500 kg to LEO, resulting in over $16,000 per kilogram, around four times that of SpaceX.

SpaceX’s cost savings were even more advantageous compared to existing options, well, option. The only other commercial launch provider before SpaceX was ULA, a joint venture between Boeing and Lockheed Martin. With their monopoly, and the intelligence community and the Department of Defense, who are more worried about reliability than cost, as customers, ULA’s launch prices were already expensive and inflated for profit 19. When the US Air Force finally certified SpaceX in 2015 for defense launches, SpaceX immediately won its GPS contracts. As of 2024, SpaceX almost dominates USAF contracts, and several competitors are calling for “increased competition among launch providers” 20.

All of these technological and cost improvements have made SpaceX the largest launch provider in the world. It can launch humans to the International Space Station and hundreds of its Starlink satellites within a few days. SpaceX boosters are reused over 20 times, and two of them, Booster 1061 and 1062, have been launched 23 times 7. Whereas before, NASA asked for new boosters to be used for human space flights, NASA now accepts recycled boosters, which they now see as flight-tested. SpaceX, a private company, did what government agencies arguably couldn’t due to institutional limitations and reignited an excitement for space exploration. We are closer to the distant promises of multi-planetary civilization thanks to recent developments in the space industry including private companies and SpaceX, the model space company. Through SpaceX’s story, I’ve seen how innovation can disrupt an industry.

SpaceX continues to challenge itself with its never-ending ambition and its newest project, Starship. Intending to carry up to 100 people while being fully reusable, it has a designed payload capacity of 100–150 tons or even higher to LEO, five times that of Falcon 9 1821. The rocket, currently under flight testing, has already surpassed Saturn V as the most powerful rocket ever flown and promises unparalleled capability and cost. Continuing its development strategy, SpaceX attempts new designs and objectives every launch, making the test flights arguably the most exciting launch events in recent years. In the most recent launch, IFT-5, SpaceX successfully caught their Super Heavy booster, a first in any orbital rocket 22. Their authentic progress on their promise of making humans multi-planetary is what I’ll be excited about when I watch Starship’s next test flight, IFT-8.