Status Report

Testimony of Elon Musk before the House Science Committee’s Subcommittee on Space and Aeronautics

By SpaceRef Editor
March 19, 2004
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How would you characterize the state of the U.S. space launch industry?

It is common knowledge that the US space launch industry is fundamentally uncompetitive. An appropriate comparison one could draw is the US auto industry of the 1970’s, prior to entry of the Japanese. However, that would be quite flattering. At no point during that period did General Motors decide, as Boeing has recently done, that they would only service government customers.

One must be cautious, therefore, in reaching launch vehicle economics conclusions that are based on historical US costs. What the reliability and price of launch should be cannot be determined by looking at Boeing and Lockheed, any more than one could properly draw conclusions about automobile reliability and pricing by looking at a 1975 Pinto or Cadillac.

Please note that I emphasize and place reliability ahead of price. The Japanese automobiles, especially in the 1980’s with the adoption of total quality management techniques, were not just lower cost, but also of much greater reliability. The latter was arguably a bigger determinant of their success than price.

In the case of launch vehicles, the level of uncompetitiveness is so great that we at SpaceX are confident of not just a significant improvement in reliability, but also of establishing and maintaining a several fold price reduction. Hopefully, this will stimulate the other three US launch vehicle companies to re-examine their processes, as GM and Ford did in their time, and provide a better and lower cost product to their customers.

I am also optimistic that the success of SpaceX will result in other entrepreneurial companies entering the space business, both in launch and the manufacture of lower cost spacecraft. Some look at the cost of launch and comment that it only represents a portion of the total mission cost. This is a very naïve conclusion. In fact, it all starts with launch cost. If you are paying $5000/lb to put something in orbit, you will naturally pay up to $5000/lb to save weight on your satellite, creating a vicious circle of cost inflation.

The result is a cost impedance match between the spacecraft and the launch vehicle, but it is driven by the launch vehicle. If you could launch for much lower cost and manifest quickly, instead of the two years advance notice required to launch in the US, that satellite would cost a lot less. A case example is TacSat-1, the DoD satellite on the maiden flight of Falcon I.

What are the benefits and risks for the U.S. domestic launch industry, including emerging U.S. launch vehicle providers, if NASA and the Department of Defense (DoD) collaborated more in the development and purchases of launch vehicles?

The most significant benefit for the US launch industry from greater NASA-DoD collaboration would be automatic cross-certification of a new launch vehicle. If a launch vehicle is found to be satisfactory for launch of a Department of Defense satellite, then it should be satisfactory for NASA and vice versa.

That is currently not the case. For example, in the EELV program, both the Boeing Delta IV and Lockheed Atlas V have had to undergo separate DoD and NASA certification or onramp processes. The result is greater expense to the taxpayer and the aforementioned companies. SpaceX is in a similar position, where we are undergoing a DoD review of our Falcon launch vehicle by Aerospace Corporation, but will later have to repeat the process for NASA.

The biggest risk to a launch vehicle development from NASA-DoD collaboration in a development program would be excessive requirements accumulation, as occurred with the Space Shuttle. In my experience, having personally developed extremely complex technology systems, it is critical that the number of people determining requirements be kept very small and consist of only the most talented and experienced personnel. Otherwise, one may be faced with requirements that are easily addressed individually, but not combined. Asking that a product serve as either floor wax or a dessert topping is fine, but not both at the same time.

What specific recommendations would you make for how NASA and the DoD can encourage the healthy growth of the U.S. domestic launch market, especially for emerging commercial launch providers?

Buy an Early Launch

Although our Falcon launch vehicle has been an entirely private development, the DoD has been very supportive by purchasing the first flight. Here we would like to express our thanks to Air Force Space Command, the Force Transformation group in the Office of the Secretary of Defense and the Naval Research Laboratory. Our country should be proud of those organizations and what they are doing to strengthen our capabilities in space.

To date, there has been limited dialogue with SpaceX initiated by the launch vehicle procurement office of NASA. This may be a function historically of the Code M office operating under the assumption that they have no mandate to foster new US launch providers. We recommend that this be established as an explicit goal and that NASA offer to buy the first or at least an early launch of a new vehicle, even if only on a success contingency basis. A promising sign is the funding allocation in the proposed NASA budget referred to as the Small Payload Launch Initiative.

Streamline the Regulatory Process

Obtaining approval to launch from the Government ranges is a very complex and arduous process. Once SpaceX has completed this process for the Falcon I, we will work with the Air Force to provide a series of recommendations for how this can be streamlined, without sacrificing safety, for other emerging launch providers. Please note that this will not benefit SpaceX, as we will have already received our approval. We will do it simply because it is a good thing for our country and the cause of space exploration will be greater served.

Increase and Extend the Use of Prizes

The strategy of offering prizes for achievements in space technology or launch vehicle development milestones can pay enormous dividends. We are beginning to see how powerful this can be by observing the recent DARPA Grand Challenge and the X-Prize. History is replete with examples of prizes spurring great achievements, such as the Orteig Prize, famously won by Charles Lindbergh, and the Longitude prize for ocean navigation.

Few things stoke the fires of American creativity and ingenuity more than competing for a prize in fair and open competition. The result is an efficient Darwinian exercise with the subjectivity and error of proposal evaluation removed. The best means of solving the problem will be found and that solution may be in a way and from a company that no-one ever expected.

We strongly endorse and urge Congress to support and extend the proposed Centennial Prizes put forward in the recent NASA budget. No dollar spent on space research will yield greater value for the American people than those prizes.

What unique capabilities do emerging launch vehicle providers, like SpaceX, provide to NASA and the DoD?

The service of space transportation is defined by four variables: reliability, cost, responsiveness and payload environment. Emerging launch vehicle providers can provide breakthroughs in all areas.


Current launch vehicles are considered by NASA and the DoD to be “reliable” if their failure rate is only one in fifty. In any other mode of transport, this would be considered outrageously unreliable. New companies might ultimately provide reliability levels more comparable with airline transportation.

In the case of SpaceX, we believe that our second generation vehicle in particular, the Falcon V, will provide a factor of ten improvement in propulsion reliability. Falcon V will be the first US launch vehicle since the Saturn V Moon rocket that can complete its mission even if an engine fails in flight – like almost all commercial aircraft. In fact, Saturn V, which had a flawless flight record, was able to complete its mission on two occasions only because it had engine out redundancy.


Citing an inability to sell rockets commercially, the incumbent launch vehicle providers are dramatically increasing their prices, forcing NASA and the DoD to do fewer and fewer missions while paying more and more. The effect is material, severe and gets worse every year. For a given budget, this obviously results in being forced to cancel missions that might otherwise have flown. Apart from public relations, there is no practical difference between a mission that was canceled for cost reasons and one that failed for other reasons. Either way, you have lost the mission.

In contrast, the SpaceX launch vehicles are commercially competitive worldwide in price and are only a fraction the cost of our US competitors. Moreover, we expect to decrease our prices in real, if not absolute, terms every year.

Launch vehicle pricing is driven by five factors: company overhead, engine costs, airframe costs, avionics costs and launch operations (including payload integration and range costs). Factoring in overhead alone, as anyone could tell by visiting our headquarters, SpaceX can produce a launch vehicle at half the price of Boeing or Lockheed. We have also made significant strides in each of the technical cost drivers, although time does not allow me to address each in detail. I would be happy to do so in the question period.


The minimum time from contract signing to launch for incumbent US launch companies is approximately two years. For the DoD in particular, this means a very constrained ability to respond quickly to threats as they develop. If space assets are needed either to cover a particular geography or replace an unexpected loss of coverage, they cannot be deployed in time. Emerging launch vehicle companies, like SpaceX, will provide a response time measured in months or weeks.

Payload Flight Environment

Existing rockets provide a terrible flight environment for satellites that is extreme in noise, vibration, shock and g-loading. These factors drive much of a satellite’s design, despite the fact that it only sees these loads for the 10 to 15 minutes required to reach orbit. For the remaining years of life, being in microgravity, the satellite sees essentially zero load.

New launch vehicles, like the Falcon, provide a much better flight environment, thus making the satellite design easier and the satellite itself more likely to reach orbit safely.

SpaceRef staff editor.