Air Force Report Shows Staggering Cost Difference Created by SpaceX

Good news for Elon Musk and his company's future.

Getty Images / Joe Raedle

The U.S. Air Force recently made public its budget estimates for the 2018 fiscal year, and the numbers emphasize just how drastically SpaceX is managing to slash space launch costs. The difference is staggering and confirms a truth about SpaceX — nobody can compete Elon Musk’s reusable rocket company when it comes to cost.

The new document shows the Air Force estimates the “unit cost” of a single United Launch Alliance (ULA) rocket launch in 2020 to be about $422 million. Ars Technica points out that the average SpaceX launch cost for a basic satellite is about $65 million.

Ars Technica’s deep dive into these numbers points out a few things. It’s critical to note that for many years, ULA basically had a monopoly on launching national security payloads for the government, including back in 2014 when the U.S. Government Accountability Office issued a report on launch cost estimates for the Air Force. At the time, SpaceX began to pursue cheaper launch costs to compete for such contracts.

However, it was incredibly difficult to compare launch estimates across different companies. With the 2016 National Defense Authorization Act, the Air Force is required to make such estimates on a single budget line beginning in 2020. The $422 million figure for 2020 (and the $424 million figure for 2021) is essentially a composite number that Ars Technica presumes, based on conversations with space policy experts, is what the Air Force believes it would have to pay per launch if ULA continued to fulfill all of the government’s launch needs.

SpaceX, for its part, has been making aggressive inroads into attaining more government contracts for launches. Most recently in May, for example, the company launched its first U.S. military satellite into orbit. The Air Force has previously awarded SpaceX contracts for satellite launches coming out to $83 million and $96.5 million, which account for all cost burdens relevant to the government. As Ars points out, this seems to be comparable to the “unit cost” listed in the Air Force’s 2020 launch estimate.

SpaceX CEO Elon Musk weighed in on the new report himself, over Twitter.

The comparison of SpaceX’s and ULA’s numbers is likely to help pivot the government’s goodwill, more towards Musk and his company and away from ULA. With such a stark difference in costs, it’s almost assured we’ll be seeing more SpaceX launches taking up government satellites into space within the next few years, as well as watching ULA slash its launch cost in order to stay competitive for contracts.

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