George:
Actual prices vary but are not consistently below the $50 m “internet”
price for a reused F9 launch.
No inflation in these prices is to be expected: inflation is running near
zero throughout the economy.
What we can observe is that if refurbishment cost are zero, than the
benefit of depreciating a stage over, say, five uses instead of one should
be adding about 28m per flight to free cash flow. ($35m cost of stage
depreciated at $7 m per launch instead of at $35 m per launch).
Since it is unlikely recovery and refurbishment cost nothing (the drone
ship has operating costs and depreciation; once landed the vehicles require
moving back to the processing facility where something must occur to make
them certifiably ready for the next launch); and since there is no data on
what those costs might be, we can at best conclude that reuse may be
generating free cash flow but if so, that benefit is being retained by the
company rather than passed on to customers as still lower prices.
Bill
On Sun, Apr 5, 2020 at 2:35 AM George Herbert <george.herbert@xxxxxxxxx>
wrote:
The cost seems to be lower though for commercial buyers and reused
boosters, compared with annual inflation baselines.
-George
Sent from my iPhone
On Apr 4, 2020, at 9:35 PM, William Claybaugh <wclaybaugh2@xxxxxxxxx>
wrote:
George:
But facts matter: the price decrease came from pulling the cost out of
expendable rockets.
The subsequent conversion of those then very low priced ELV’s into
somewhat higher priced RLV’s (in price per unit mass to orbit) does not
reveal any new information about RLV’s; nor can it serve as an existence
proof that those RLV’s are lower cost than the lowest cost ELV’s. Indeed,
the data slightly support the conclusion that the ELV version of F9 was
cheaper.
Bill
On Sat, Apr 4, 2020 at 6:37 PM George Herbert <george.herbert@xxxxxxxxx>
wrote:
There’s a certain amount of pointlessness to the theoretical argument;
SpaceX semi-reusable Falcon 9 and Heavy are far cheaper to buy than any
competition, and have been for some time.
Whether more fully reusable, bigger, methane vs RP-1 next step works or
not there today are only companies and agencies and countries who
understand the current Market and who don’t.
IMHO
Boemart seem unclear. ULA gets it but is hampered by parents. NASA is
in parts aware and in parts unclear. ESA and Arianespace are politically
blinded. China is aware but continuing national programs of record while
it experiments with innovation and gave up on foreign commercial launches.
Russia... hard to tell. But politically hampered.
-George
Sent from my iPhone
On Apr 4, 2020, at 2:08 PM, William Claybaugh <wclaybaugh2@xxxxxxxxx>
wrote:
Henry:
When RLV’s will be more economic than ELV’s remains unclear to me and
many others. I doubt I have ever suggested that they would never be lower
cost.
Our dispute has always been about when, not if.
Bill
On Sat, Apr 4, 2020 at 3:03 PM Henry Vanderbilt <
hvanderbilt@xxxxxxxxxxxxxx> wrote:
Bill,
And you've never disputed the matter with me or anyone else here since?
Okay...
best
Henry
On 4/4/2020 11:46 AM, William Claybaugh wrote:
Henry:
You really need to revisit your assumptions about me. Griffin and I
proved that in 1994.
Bill
On Sat, Apr 4, 2020 at 12:44 PM Henry Vanderbilt <
hvanderbilt@xxxxxxxxxxxxxx> wrote:
Ah! We agree that reuse is a benefit!
This is progress...
best
Henry
On 4/4/2020 11:21 AM, William Claybaugh wrote:
Henry:
Have it your way if you wish.
I am certain that Elon will tell you that the first benefit of reuse is
in spreading depreciation; and, that spreading amortization is a very
second order effect.
Bill
On Sat, Apr 4, 2020 at 12:10 PM Henry Vanderbilt <
hvanderbilt@xxxxxxxxxxxxxx> wrote:
Bill,
Terminological quibbling aside, what I'm talking about is something
alien to the cost-plus trad space industry: Commercial businesses
ferociously controlling their costs, both upfront and ongoing.
Up-front costs are like poison, while ongoing operating costs are
merely like heroin. Both are worth considerable effort and ingenuity to
minimize. And SpaceX, in successfully going for reusability, has avoided
both a big initial chunk of poison and a fair-sized heroin habit, both
implicit in the trad cost-plus approach to eventually flying circa sixty
booster cores a year.
Given we once again seem to be talking past each other - it's good to
be back! - perhaps best we simply continue to disagree about this being a
significant part of why SpaceX is cleaning the trad industry's clock.
cheers
Henry
On 3/24/2020 8:19 AM, William Claybaugh wrote:
Henry:
Terms matter: what you are talking about is depreciation, not
production savings.
I’m will to be educated but I would be shocked if making 1/5 as many
vehicles resulted in a production system 1/5 the previous size: that is
simply not how production works.
There are high fixed costs in any production line as well as minimum
costs.
Bill
On Tue, Mar 24, 2020 at 8:49 AM Henry Vanderbilt <
hvanderbilt@xxxxxxxxxxxxxx> wrote:
Bill,
The long-term production difference in question, by definition, is a
factor of five times. Not 2:1 either way around a base of 12/year.
SpaceX knew this going in. Being sensible people *not* locked into
the established way of doing things, they likely would have set up a
production establishment for sixty expended cores a year very differently
than they did the plant for ~12 5X reused cores. Twelve a year, as you
say, is pretty much craft production - modest production tooling and a
lot
of very skilled hand labor, low plant investment but relatively high
ongoing personnel cost. 60X a year is still not exactly Willow Run, but
sensible people planning that would very likely invest considerably more
in
plant and tooling so as to not require 5X the skilled personnel plus
2nd and 3rd shift differentials, working in
~2X the modest 12/year plant (assuming it was originally run
one-shift).
Yes, I oversimplified by saying "1/5th the size of production
establishment". Thought I'd allowed for that sufficiently with "(to
a first approximation)", oh well. And yes, "size" was not quite the mot
juste; "cost" might have been closer to what I was driving at.
My basic point: SpaceX gambled on 5X reusability to greatly reduce
their up-front investment in, and ongoing cost of, F9 booster production.
And they seem to have won. By a quick count, 92 F9 booster core flights
so
far, and already over half of those (51) have been used boosters. The
used
proportion will only rise from here. And they did this on the up-front
investment for a dozen a year.
In other words, one of the reasons they're so far ahead of the game
now is they gambled and won bigtime on a major-capital saving shortcut at
the start. I hope that's clearer.
Henry
On 3/23/2020 2:00 PM, William Claybaugh wrote:
Henry:
It isn’t clear to me that there is all that much difference between
making 12 per year and making 6 or 24.
One saves the material costs and the marginal labor cost but the
infrastructure doesn’t (or at least shouldn’t) change much over that
range
of production.
That said, if you optimize your system for four units per year you
will find making 24 more costly than a line optimized for twenty-four.
But rates of a few dozen per year—or a few hundred—all fall into
“craft production” and are not going to show economically significant
variation on production costs. The benefit of even a few reuses is in
the
depreciation of the hardware cost over multiple launches.
Bill
On Mon, Mar 23, 2020 at 2:24 PM Henry Vanderbilt <
hvanderbilt@xxxxxxxxxxxxxx> wrote:
Another way of looking at this that I think is relevant: 5-reuse
boosters allows SpaceX to support a given flight rate with (to a first
approximation) 1/5th the size of production establishment they'd need
for
fully expendable operations.
Henry
On 3/23/2020 8:12 AM, William Claybaugh wrote:
Robert:
There is too little data to make any assertion about stage longevity
at this point.
However, ignoring propellant and launch operations costs, five
flights per booster would indicate a cost per booster at 20% of the
manufactured cost, not including refurbishment between flights. The
former
is around $30-35 million, so $6-7 Million per flight, again, not
including
refurbishment. If an overhaul costs more than about $6 million, it would
make more sense to simply build a new five launch lifetime stage.
We may note that compared to a $50 million price, these depreciated
stage cost estimates suggest either a good deal of profit or that other
costs (launch operations, refurbishment) are high.
Bill
On Mon, Mar 23, 2020 at 8:51 AM Robert Steinke <
robert.steinke@xxxxxxxxx> wrote:
From hobbyspace.com about the latest Falcon 9 launch:
" A first stage engine shut down prematurely (just before staging)
but had no effect on the mission as the other 8 engines made up the
difference. The booster also failed to make a successful landing on a
sea
platform. This was the fifth flight of this booster."
That was after a previous launch attempt aborted due to slightly
high power.
Wonderful demonstration of engine-out fault tolerance, but it does
look like the rocket is showing some wear and tear after 5 flights.
What
does this do to their economics if stages need an overhaul/have an
increased chance of loss of vehicle after only 5 flights?
