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Elon Musk says SpaceX could soon face bankruptcy – here’s why that’s unlikely

(NASASpaceflight - bocachicagal)

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4 years ago

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In a new leaked email, SpaceX CEO Elon Musk says that the company could go bankrupt if, by the end of 2022, it can’t achieve Starship and Starlink milestones that are by all practical appearances out of reach.

The news – first broken by SpaceExplored – comes about a week after CNBC reported that Musk was “shaking up” SpaceX’s leadership by effectively firing its vice president of propulsion due to “a lack of progress” in the development of Starship’s Raptor engine. Now, apparently after taking his first good look ‘under the hood’ in a while, Musk says that “the Raptor production crisis is much worse than it seemed a few weeks ago.” Worse, the CEO has implied that if it “can’t get enough reliable Raptors made [by the end of 2022]…[SpaceX will] face a genuine risk of bankruptcy.”

The email raises both skepticism and several major questions.

First and foremost, can there be any truth to Musk’s claim that SpaceX could go bankrupt because of an unspecified “Raptor production crisis [and disaster]?” Put simply, not really. Musk’s argument is simple enough. According to his estimations, the first-generation (V1) Starlink satellite internet constellation is “financially weak by itself,” which has led SpaceX to develop a much larger, more advanced second-generation (V2) Starlink satellite and constellation that the company’s existing “Falcon [rockets have] neither the [payload] volume nor mass to orbit” to launch. To efficiently launch the Starlink V2 constellation, then, Musk says SpaceX needs Starship to be operational.

Up to that point, nothing in Musk’s email implies that a “Raptor production crisis” could pose any serious harm to SpaceX beyond annoying delays. More than two years ago, Musk believed that Raptor V1.0 already cost less than $1M to produce. As of 2021, SpaceX (again per Musk) is completing an average of one Raptor engine every two days and currently has 35 functional engines installed on Starship and Super Heavy booster prototypes in Boca Chica, Texas. Already, at a rate of one engine every 48 hours, SpaceX’s Raptor production capabilities are theoretically strong enough to fully outfit a significant Starship fleet.

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Both stages of Starship are designed to be rapidly and fully reusable and absolutely need to be to efficiently and rapidly launch SpaceX’s Starlink V2 constellation. In theory, a production capacity of ~180 Raptors per year should allow SpaceX to outfit a fleet of three Super Heavies (99 engines) and 13 Starships (72 engines). Even if Super Heavy booster reuse is initially no faster than Falcon (~1 launch per month) and Starship reuse is no faster than Dragon (~3 launches per year), that fleet would be able to launch at least 36 times per years. Even if SpaceX’s former propulsion executives somehow pulled the wool over Musk’s eyes, tricking him into seeing engines that just weren’t there and hiding hundreds of millions of dollars in secret cost overruns from the company’s own accountants, an annual run rate of 100 Raptor engines at a cost of $5 million each would still be able to power a fleet of six reusable ships and two boosters capable of ~20 launches per year.

Starship S20 recently aced its first six-Raptor static fire. (SpaceX)
Super Heavy B4 currently has 29 functional Raptor engines installed. (SpaceX)

Musk says that SpaceX will only face the risk of bankruptcy if it “cannot achieve a Starship flight rate of at least once every two weeks next year” – equivalent to 26 launches annually. Again, being deceived for years would be a terrible look but nothing described above appears to have any chance of bankrupting SpaceX. However, the CEO also says that SpaceX “is spooling up” one or several factories to produce “several million” Starlink user terminals (dishes) per year in a process that “will consume massive capital [and assumes] that [Starlink V2 satellites] will be on orbit to handle the bandwidth demand.” He even goes as far as to say that those millions of terminals “will be useless otherwise.”

Once again, while what he describes is an undeniable hurdle for SpaceX, the company is making a choice to “consume massive capital” to “spool up” Starlink dish factories before the constellation capacity needed to take advantage of those dishes has been secured. SpaceX doesn’t need to make such a massive investment so quickly when it could instead split that money with Starship, ensure that Starship and Raptor and Starlink V2.0 satellites are ready or close to ready for routine launches, and then invest heavily in dish production.

SpaceX says Starship will launch the next generation of Starlink satellites

For example, just this month, SpaceX raised almost $350M from investors that have a practically bottomless appetite for SpaceX investments. Combined, by the end of the year, SpaceX will have likely raised more than $2.3B in 2021 alone. Valued at more than $100 billion, the company could – as a last resort – feasibly raise double-digit billions in one fell swoop with an IPO. Put simply, the only way SpaceX could ever go bankrupt in the near term would be by consciously letting itself drown in a sea of life preservers.

This is not to say that SpaceX doesn’t have numerous massive challenges ahead of it, nor is it to say that its fundraising potential is truly limitless. Investors could eventually become disillusioned. It’s entirely possible that it will take SpaceX years longer than Musk expects to begin routine Starlink V2.0 launches with Starship. Environmental approvals alone could easily preclude more than five orbital Starship launches in 2022 and potentially prevent regular (i.e. biweekly) launches well into 2023. But the fact of the matter is that unless Elon Musk is telegraphing signs that the rest of the company’s finances are a house of cards, the odds of SpaceX actually going bankrupt anytime soon are vanishingly small. In reality, he’s likely just attempting to (for better or worse) instill some amount of fear and panic in SpaceX employees to encourage them to work more hours and take fewer days off.

Update: Musk has tweeted a brief public comment confirming that he believes bankruptcy is actually an unlikely – but not impossible – outcome for SpaceX.

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Eric Ralph is Teslarati's senior spaceflight reporter and has been covering the industry in some capacity for almost half a decade, largely spurred in 2016 by a trip to Mexico to watch Elon Musk reveal SpaceX's plans for Mars in person. Aside from spreading interest and excitement about spaceflight far and wide, his primary goal is to cover humanity's ongoing efforts to expand beyond Earth to the Moon, Mars, and elsewhere.

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Elon Musk

Elon Musk reveals date of Tesla Robotaxi’s first rides open to public

Tesla CEO Elon Musk continues to roll out new details regarding the Robotaxi launch that is expected to happen soon.

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6 minutes ago

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June 10, 2025

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Credit: Tesla

Tesla Robotaxi is set to launch in the coming days, but the first rides will be confined to those who receive invitations that the company sends out. However, CEO Elon Musk revealed the date that Tesla is aiming for when anyone in the general public will be able to call for a Robotaxi.

There has been quite a bit of information today about what appears to be an imminent launch of the Robotaxi platform. The first video of a Robotaxi was captured on a public road in Austin today, just one day after Tesla was added to the City of Austin’s list of licensed autonomous vehicle operators.

First Tesla driverless robotaxi spotted in the wild in Austin, TX

In the coming days, it is expected that Tesla will launch the Robotaxi platform in Austin to a select few. For now, Tesla is taking this ultra-conservative approach as it pertains to the rollout, citing safety precautions. It will be the first time Tesla has done this in public and offered it to people outside of the company.

It did launch a small, limited version of it to employees last month in Austin and the San Francisco Bay Area, but there was someone in the driver’s seat. Today’s video only had an occupant in the passenger seat.

People are eager to know: when will they be able to fetch a driverless Tesla Model Y Robotaxi in Austin for themselves? Musk finally answered the long-awaited question with a tentative date of June 22:

Musk cited that Tesla’s utmost priority is still safety and not necessarily the speed of rollout. The current plan seems to be to deploy it in a controlled and slow fashion until confidence is at an extremely high level. Musk seems to believe the rollout will go smoothly, as the date comes less than two weeks after the initial launch.

Anyone who has experienced Full Self-Driving for themselves knows what the cars are capable of. However, Tesla, at this point in time, still requires drivers to pay attention and remain ready to take over the wheel in case of an emergency. This will be a major step in the right direction for Tesla as it prepares to launch Robotaxi in Austin and slowly expand to surrounding areas.

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Elon Musk

Elon Musk says Tesla Robotaxi launch will force companies to license Full Self-Driving

“The automakers keep being told that this isn’t real or that just buying some hardware from Nvidia will solve it. As Tesla robotaxis become widespread and their other solutions don’t work, they will naturally turn to us.”

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4 hours ago

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June 10, 2025

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Tesla CEO Elon Musk says the automaker’s Robotaxi platform launch later this month will essentially force other companies to license Full Self-Driving to achieve their own goals of achieving autonomy.

Musk’s statement comes as a video captured today showed the first Tesla Robotaxi test mules on public streets in Austin, Texas, just one day after the City officially listed the company as an autonomous vehicle operator.

A prediction by investing YouTube and Tesla community member Dave Lee stated that “at least one automaker by end of year” will license Full Self-Driving from the Musk-led company, as it will give rivals the confidence to use the software to run their own self-driving operations.

Lee detailed his theory by stating that the company that chooses to commit to FSD licensing will not be able to integrate the hardware and sell those units immediately. Instead, it will take two years or so to solve the engineering and design applications.

First Tesla driverless robotaxi spotted in the wild in Austin, TX

Musk revealed his true thoughts on other automakers’ attempts at vehicle autonomy, and said many are being told that Robotaxi is not real or that they can solve their problems with hardware orders to Nvidia.

He went on to say that companies will be forced to turn to Tesla at some point or another, because Robotaxi will be widespread and their solutions to figuring out an effective deployment will prove to be failures:

“The automakers keep being told that this isn’t real or that just buying some hardware from Nvidia will solve it. As Tesla robotaxis become widespread and their other solutions don’t work, they will naturally turn to us.”

Musk has not been shy to respond to speculation regarding the video of the Robotaxi, which was shared on X earlier today. This is perhaps one of the more fiery things he revealed. He seems ultra-confident in what Tesla will prove and achieve in the near future with the launch of the Robotaxi platform.

Many believe it will be rolled out this month. Bloomberg reported recently that Tesla was internally aiming for June 12. The company has not directly responded to these rumors.

Tesla has discussed on several occasions that it is in talks with an automaker about licensing Full Self-Driving, but it has never revealed who. The company first revealed discussions with another automaker in early 2024 when Elon Musk said:

“We’re in conversations with one major automaker regarding licensing FSD. It really just becomes a case of having them use the same cameras and inference computer and licensing our software. Once it becomes obvious that if you don’t have this (FSD) in a car, nobody wants your car. It’s a smart car… The people don’t understand all cars will need to be smart cars, or you will not sell, or nobody would buy it. Once that becomes obvious, I think licensing becomes not optional.”

Tesla confirms it is in talks with major automaker for potential FSD licensing

Many, including us, suspected that Ford was the company that Tesla was speaking of due to Musk’s relationship with Jim Farley, which resulted in the legacy automaker being the first major car company to adopt Tesla’s North American Charging Standard (NACS), which gave them access to the Supercharging Network.

This catalyzed an onslaught of companies choosing to make the same move as Tesla had truly set itself apart in terms of charging infrastructure.

Companies may be forced to make a similar decision if it can make the same type of statement with the rollout of Robotaxi.

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Tesla CEO Elon Musk reveals new details about Robotaxi rollout

The first Tesla Robotaxi unit was spotted in Austin earlier today, and CEO Elon Musk is revealing some cool new details.

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6 hours ago

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June 10, 2025

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Tesla CEO Elon Musk has revealed new details about the company’s relatively imminent rollout of the Robotaxi platform as the suspected launch date of June 12 continues to near.

Earlier today, the first video showing the first driverless Tesla Robotaxi in Austin was shared on X, just a day after the City officially listed the company as an autonomous vehicle operator on its website. Tesla is listed as a company in the “Testing” phase.

The initial details of the Robotaxi are being revealed by Musk, who is carefully releasing small tidbits that seem to show the capabilities of the entire Tesla fleet, and not necessarily just the vehicles that will be involved in the initial rollout in Austin.

First Tesla driverless robotaxi spotted in the wild in Austin, TX

His first tidbit is one that many Tesla owners and fans will already know: many Teslas are capable of this driveless performance, but Full Self-Driving is not yet refined to the point where the software is quite ready to handle it. Current versions are robust, but not prepared for driverless navigation. The hardware, however, will enable Teslas to be Robotaxis, even if they’re already purchased by owners:

This is one of the biggest advantages Tesla has over other vehicle makers. Simply put, the Over-the-Air software updates that will roll out to FSD users will eventually make their cars into Robotaxis as well.

However, Musk shed some details on the version of FSD that is being run in these new Robotaxis that were spotted. Musk said that the version these Robotaxis are running is a new version, but will soon “merge to main branch.”

There is also an even newer version that has four times the parameters as this newer version that the test-stage Robotaxis are using, but Musk admits that this needs significant refinement before it is released to the public.

As of now, Tesla is simply teasing the actual launch date of the Robotaxi program, but Bloomberg reported earlier this month that it will occur on June 12.

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