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Including Falcon Heavy's two side boosters, SpaceX has successfully completed an array of land-based recoveries in the last four months, but not a single landing on a drone ship. (SpaceX) Including Falcon Heavy's two side boosters, SpaceX has successfully completed an array of land-based recoveries in the last four months, but not a single landing on a drone ship. (SpaceX)

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How SpaceX Falcon Heavy undercuts its competition three-fold

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Following the stunningly successful debut of SpaceX’s giant Falcon Heavy rocket, the spaceflight fan community and industry have been abuzz with attempts to estimate Falcon Heavy’s true price as an expendable or partially expendable launch vehicle. Thankfully, CEO Elon Musk appears to have been interested enough to fill in the knowledge gaps concerning the rocket’s full range of prices and took to Twitter to answer several questions.

Among several other intriguing comments that I will cover later on, Musk revealed that a fully expendable Falcon Heavy would cost approximately $150 million, while a partially expendable FH would sport 90% of the performance while expending the center stage and landing the side boosters at sea rather than on land. In that latter mode of operation, a Falcon Heavy launch would cost about $95 million, whereas unlocking the final 10% of performance with a fully expandable configuration would be priced around $150 million. While $90-150 million is undeniably a huge amount of cash in any sense, Falcon Heavy delivers far more performance for multiple times less than the available competition.

The only real competition for Falcon Heavy is the United Launch Alliance’s (ULA) Delta IV Heavy rocket, a triple-core launch vehicle with nine total launches under its belt since its 2004 debut. Aside from one test launch for NASA, all of DIVH’s operational flights have been tasked with launching uniquely heavy military payloads to uniquely high orbits – both of which require an exceptionally capable rocket. Designed as a fully expendable vehicle, ULA’s Heavy is capable of launching ~29,000 kg to low Earth orbit (LEO) and ~14,000 kg to geostationary transfer orbit (GTO), whereas the fully reusable Falcon Heavy has a max payload of about 23,000 kg to LEO and 8,000 kg to GTO.

However, if Musk’s claim of 10% performance loss as a partially expendable launcher holds true, the story changes quite a bit. In its fully expendable configuration (call it the Delta IV Heavy config), Falcon Heavy is a beast of a rocket, quoted at ~64,000 kg to LEO and 26,700 kg to GTO. Subtract 10-25%, and Falcon Heavy still trounces the Delta rocket, all while costing well under $150 million, and probably closer to $100 million. According to a late-2017 report from the US Government Accountability Office, Delta IV Heavy costs as much as $400 million per launch, although ULA CEO Tory Bruno responded to Musk’s claim of $400-600 million earlier this morning with a figure of $350 million for the rocket.

Such a high price is not exceptionally surprising, if only for the fact that Delta IV Heavy launches as infrequently as it does. With an average cadence of one launch every 18 months or 1.5 years, the technical expertise and facilities required to design, build, and operate the DIVH must remain employed regardless of whether the rocket launches. Although Delta was previously a family of rockets, thus enabling some of its designers and builders to cross-populate, the final non-Heavy Delta launch occurred just a handful of weeks ago. Short of layoffs, this means that ULA’s Delta expertise are now solely working to build and operate a rocket with approximately seven launches scheduled between 2018 and 2023 – in short, $400 million is quite plausibly on the low end of the rocket’s actual cost, backend included. Both ULA and the Department of Defense are aware, however, that Delta IV Heavy is the only rocket currently capable of launching some of the missions desired and required by the National Reconnaissance Office (NRO), and are thus at least partially willing to swallow the vehicle’s high cost. SpaceX’s Falcon Heavy is bound to introduce some much-needed competition into the stagnant market after its highly successful introduction, but it will likely be a year or more before the new rocket is certified to launch the same highly sensitive and expensive payloads as ULA’s Delta IV Heavy.

How are SpaceX’s prices so low?

Still, this does not answer the “how” of SpaceX’s prices. What can even begin to explain Delta IV Heavy’s 200-400% premium over Falcon Heavy? The best answer to this crucial question was by no coincidence also one of the main reasons that Elon Musk created SpaceX. From the very beginning, SpaceX pursued a slim and flexible organizational structure, prioritized hiring brilliant and motivated engineers with hands-on experience, and encouraged the practice of thinking from first principles. Dolly Singh, head of SpaceX’s talent acquisition in the mid-2000s, described the rocket startup’s atmosphere like so:

We searched for candidates with a proven history of building and breaking things…candidates who had been tinkering with hardware systems for years…I knew the people who filled my open positions would be put to the test every day and would be asked to meet heretofore impossible targets. We looked for people with a history of defeating the odds, who had made careers of overcoming obstacles.

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Birds of an organizational feather

In essence, this organizational philosophy has led SpaceX to become vertically integrated to the extent that is effective without comparison in the global aerospace industry. Vertical integration is a term used to describe the practice of bringing aspects of development and manufacturing in-house, whereas a company not attempting to integrate vertically would instead contract and subcontract out their design and manufacturing needs wherever possible. Musk is hard set on this philosophy: if SpaceX can do it in-house more cheaply than a contractor, they will become their own supplier. Companies like ULA – a cooperation between Lockheed Martin and Boeing – have the better part of a century of experience as heavyweights in the US military-industrial complex, a relationship that has quite literally changed processes of acquisition and created alternate realities of pricing.

Thick with armies of lobbyists, those military-industrial complex titans have help to direct the US down a path that has solidified truly insane concepts as the status quo. A cost-plus contracting framework almost universally applied in the procurement of military technology means that companies are nearly awarded for delays and cost overruns. Possibly even more absurd, the euphemistic strategy of “concurrency” espoused by those same titans has somehow convinced the upper echelons of US defense procurement that it is a good and preferable strategy to fully fund and build technologies en mass before any testing has been. Unsurprisingly, these two philosophies have led to years of delays and huge cost overruns as contractors and their subcontractors are forced to repair or modify extremely complex technological systems once bugs and problems are inevitably discovered down the road. The F-35 Lightning II – developed by Lockheed Martin – is perhaps the most famous example with near-weekly tales of abject failure – gun systems that are years late and inaccurate to the point of uselessness, extremely buggy and flawed software that the jet literally cannot function without, an oxygen system that frequently gives its pilots hypoxia and grounds the entire F-35 fleet, among dozens of other incredible missteps – and all for the most expensive fighter aircraft yet developed in the US. Tyler Rogoway, one of the best practicing defense journalists, has covered the debacle of concurrency and cost-plus contracting for many years and is a recommended read for anyone interested in the above industries.

Now, back to spaceflight…

Parting from this partial diversion, the purpose of this brief history of military procurement is to provide some level of context as to why NASA and its spaceflight contractors act as they do, where they derived their organizational structures and philosophies, and why SpaceX is different.

Famously, a NASA study in 2010 estimated the cost of SpaceX’s Falcon 9 development to be approximately $4 billion under variables representative of NASA’s own R&D and engineering culture, or $1.7 billion using a more commercial, fixed-cost strategy. When SpaceX offered to cooperate with the addition of their internal data on Falcon 9’s cost, the same model’s estimate plummeted to less than $600 million, representing a truly extraordinary overestimate of SpaceX’s development costs, while SpaceX’s data showed approximately $300 million of investment in the first version of Falcon 9. Simply put, NASA’s cost estimates were off by more than an order of magnitude (PDF) – SpaceX successfully developed an unprecedented orbital-class rocket for mere pennies to NASA’s dollar.

Famously, a NASA study in 2010 estimated the cost of SpaceX’s Falcon 9 development to be approximately $4 billion, while SpaceX’s own data showed approximately $300 million of investment in the first version of Falcon 9. Simply put, NASA’s cost estimates were off by more than an order of magnitude.

More recently, Elon Musk has stated that SpaceX invested $1 billion or more in the development of reusability for Falcon 9, and this large investment can almost entirely explain why Falcon 9’s pricing has remained essentially unchanged over its seven years of life, even if it was already the cheapest rocket in its performance class. Despite the recent introduction and rapid routinization of operational reuse, SpaceX has not publicly changed the launch price from its $62 million base. Although there have been slight acknowledgments of small discounts from customers flying on reused boosters, the general theme is that reused rockets have not meaningfully lowered the cost of purchasing a launch. In practice, the cost of refurbishment and reuse of the first several Falcon 9 boosters was likely on par with the cost of a new booster, but the real reason for the lack of magnitudes of cost reduction lies in SpaceX’s desire to recoup some or all of the capital it invested in reusability. As the company matures its reuse expertise, the cost can be expected to plummet – Cargo Dragon’s reuse, for example, reportedly saved SpaceX 50% of the cost of a new capsule, and Falcon 9 is almost certainly far easier and thus cheaper to refurbish and refly.

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While payload fairings have turned out to be harder to recover than anticipated and Falcon 9’s second stage is likely to remain expendable for the foreseeable future, those components only comprise about 30% of the rocket’s price. If SpaceX can cut the cost of reuse to maybe 10-20% of the cost of a new booster, the remaining 30-60% of a new launch’s $62 million translates to approximately $20-35 million of profit for each reused launch. If, say, the company aims to fly flight-proven boosters on half of their launches in 2018, that translates into as many as 15 launches and as much as $500 million – or half of the $1 billion investment – recouped in a single year. With the introduction of Falcon 9 Block 5 in a few months, SpaceX will soon be flying an iteration of their workhorse rocket that is far faster, easier, and cost-effective to reuse. Ultimately, depending on how much of their initial investment SpaceX intends to recover, the huge profit margins they can derive from reuse could be redirected to drastic price cuts for the customer. More realistically, the company will likely lower its prices enough to ensure that their launch business is brutally competitive, and thus use those profit margins to begin heavily investing in BFR (Big F. Rocket), BFS (Big F. Spaceship), and the company’s loftier interplanetary goals more generally.

In fact, given that SpaceX President Gwynne Shotwell has quite consistently targeted early 2019 for the beginning of prototype BFS testing, SpaceX is probably already putting a significant proportion of their profits into Mars-focused R&D. As 2018 progresses, barring any unseen speed bumps, the funds available to SpaceX are bound to explode, and huge progress will likely begin to be made on actual hardware intended to enable colonies on the Moon and Mars.

Follow along live as launch photographer Tom Cross and I cover these exciting proceedings as close to live as possible.

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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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Tesla’s next-gen Optimus prototype with Grok revealed

The video shows a new Optimus prototype answering questions and taking some very robotic steps, evidently revealing that the next-generation version is in its early stages of development.

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Tesla’s next-generation Optimus robot with AI assistant Grok has been revealed in a new video shared on X.

Tesla CEO Elon Musk was with Salesforce CEO Marc Benioff last night, and it appears the frontman gave Benioff an exclusive look at some upcoming technology.

Tesla talks Semi ramp, Optimus, Robotaxi rollout, FSD with Wall Street firm

The video shows a new Optimus prototype answering questions and taking some very robotic steps, evidently revealing that the next-generation version is in its early stages of development. It features Grok for some additional utility, as it answered questions Benioff asked in the short video.

Here’s what was uploaded to X:

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It appears that there are several big changes to this next-generation version of Optimus, some of which have been discussed by Musk and Tesla in the past.

The first is purely cosmetic, but the gold color that Optimus is wearing in this is a new and fresh look that we have not seen before.

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Perhaps the most interesting change that is evident here is the hands, which are much more detailed than past versions of Optimus:

However, we’re not too sure that these are what will be released with the next-gen Optimus, because they don’t appear to be functional, and they are more reminiscent of mannequin hands than anything.

The hands on Optimus have been a significant part of the program, as they are among the most crucial pieces of equipment on a robot. It needs to be able to perform both delicate and more imposing tasks. Tesla has aimed for Optimus to be able to thread needles or play the piano.

It was one of the most discussed improvements the company mentioned in past comments regarding how it planned to improve from Gen 2 to this next version.

Musk mentioned regarding Optimus:

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“Next-generation Optimus hand, which we have in prototype form, has actuators that have moved to the forearm, just like humans, and they operate the fingers through cables, just like human hands.”

Within Optimus lies a significant opportunity for Tesla to gain considerable strength in terms of market share and valuation.

If Tesla can efficiently develop and deploy the humanoid robot over the next several years, the company stands to gain, as companies will utilize it for tasks that require tedious labor.

Musk recently said Optimus will be a major contributor to Tesla’s valuation moving forward. He believes it will make up roughly 80 percent of the company’s value.

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Tesla CEO Elon Musk to provide more details for Master Plan Part IV

Musk stated that he would be adding specifics to the plan in a later update.

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Credit: xAI/X

Tesla CEO Elon Musk will be adding more specifics to the recently-released Master Plan Part IV. Musk shared the update on social media platform X amidst conversations about the general nature of the Master Plan Part IV. 

In a conversation on X, Musk responded to a post from Tesla retail shareholder and bull Dave Lee, who observed that the currently released Master Plan Part IV could really just be the introduction to the real plan due to its absence of specifics.

Elon Musk responded, stating that he would be adding specifics to the plan in a later update. “Fair enough. Will add more specifics,” Musk wrote in his post.

Tesla has been following Elon Musk’s Master Plans for decades. The first Master Plan, released in 2006, outlined the company’s path from the original Tesla Roadster to the Model 3, as well as the first steps for Tesla Energy. Master Plan Part Deux, released in 2016, covered the ramp of Tesla Energy, the expansion of Tesla’s vehicle lineup, and the rollout of a Robotaxi service.

Master Plan Part 3 was more ambitious as it was generally an in-depth proposal for achieving a global sustainable entry economy by transitioning to electricity-powered vehicles, homes, and industry, which will, in turn, be powered by renewable energy sources like solar and wind. Master Plan Part 3 also included a five-step plan to accomplish this, allowing the world to transition to a fully electrified future. 

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Master Plan Part IV, which was released a few days ago, focused on automation and artificial intelligence to achieve sustainable abundance. But while the first two Master Plans were very clear and specific and Master Plan Part 3 was very in-depth, Master Plan Part IV was quite general and vague in comparison. It was easy to tell that Optimus would play a big role in the pursuit of sustainable abundance, but apart from that, there were no specifics as to how Tesla intended to achieve its goals.

Fortunately, these specifics would be discussed by Musk in a later update to the plan.

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Tesla just had its best wholesale month this year in China

Tesla China’s wholesale figures include both vehicles that are sold domestically and exported abroad.

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Credit: Tesla China

Tesla China just had its best wholesale month this 2025 so far. In August, the electric vehicle maker sold 83,192 vehicles wholesale, a 22.55% increase compared to July 2025’s 67,886 units.

Tesla China’s wholesale figures are still down year-over-year, but the company’s momentum seems notable, especially with the arrival of the Model Y L.

August 2025 figures

As noted in a CNEV Post report, August 2025’s 83,192 wholesale figures are 4.04% less than the 86,697 units that were sold in the same period last year. It is, however, a 22.55% improvement from the previous month. From January to August, Tesla China sold 515,552 units wholesale, a 12.24% year-over-year decrease. 

It should be noted that Tesla China’s wholesale figures include both vehicles that are sold domestically and exported abroad. With this in mind, August’s results bode well for Tesla China, as it suggests that Gigafactory Shanghai is now hitting its pace with both its domestic deliveries and its exports. Giga Shanghai serves as Tesla’s primary vehicle export hub.

Model Y L factor

Tesla had a challenging first quarter this year, thanks in part to the changeover to the Model Y across the Fremont factory, Giga Texas, Giga Shanghai, and Giga Berlin-Brandenburg. This changeover resulted in low sales in the first quarter. Political controversies surrounding Elon Musk and violence against Tesla stores and vehicles in the first and second quarters in the United States and Europe did not help much either.

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This Q3, however, Tesla seems to be hitting its stride, especially in China. The launch of the new Model Y L has allowed Tesla to compete in the six-seat, large SUV segment, a market that was previously closed to the standard Model Y. Reports have suggested that Tesla China has been seeing a lot of demand for the Model Y L, which should help the company achieve higher sales this quarter and the remaining months of the year.

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