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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.

https://www.instagram.com/p/BVarZZSgfIP/

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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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Elon Musk

Elon Musk is now a remote DOGE worker: White House Chief of Staff

The Tesla and SpaceX CEO Elon Musk is no longer working from the West Wing.

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Credit: Elon Musk/X

In a conversation with the New York Post, White House Chief of Staff Susie Wiles stated that Tesla and SpaceX CEO Elon Musk is no longer working from the West Wing.

As per the Chief of Staff, Musk is still working for DOGE—as a remote worker, at least.

Remote Musk

In her conversation with the publication, Wiles stated that she still talks with Musk. And while the CEO is now working remotely, his contributions still have the same net effect. 

“Instead of meeting with him in person, I’m talking to him on the phone, but it’s the same net effect,” Wiles stated, adding that “it really doesn’t matter much” that the CEO “hasn’t been here physically.” She also noted that Musk’s team will not be leaving.

“He’s not out of it altogether. He’s just not physically present as much as he was. The people that are doing this work are here doing good things and paying attention to the details. He’ll be stepping back a little, but he’s certainly not abandoning it. And his people are definitely not,” Wiles stated.

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Back to Tesla

Musk has been a frequent presence in the White House during the Trump administration’s first 100 days in office. But during the Q1 2025 Tesla earnings call, Musk stated that he would be spending substantially less time with DOGE and substantially more time with Tesla. Musk did emphasize, however, that DOGE’s work is extremely valuable and critical.

“I think I’ll continue to spend a day or two per week on government matters for as long as the President would like me to do so and as long as it is useful. But starting next month, I’ll be allocating probably more of my time to Tesla and now that the major work of establishing the Department of Government Efficiency is done,” Musk stated.

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Elon Musk

Tariff reprieve might be ‘Tesla-friendly,’ but it’s also an encouragement to others

Tesla stands to benefit from the tariff reprieve, but it has some work cut out for it as well.

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tesla employee
(Photo: Tesla)

After Secretary of Commerce Howard Lutnick made adjustments to the automotive tariff program that was initially announced, many quickly pointed to the reprieve as “Tesla-friendly.”

While that may be the case right now, it was also a nudge of encouragement to other companies, Tesla included, to source parts from the U.S. in an effort to strengthen domestic manufacturing. Many companies are close, and it will only take a handful of improvements to save themselves from tariffs on their cars as well.

Yesterday, Sec. Lutnick confirmed that cars manufactured with at least 85 percent of domestic content will face zero tariffs. Additionally, U.S. automakers would receive credit up to 15 percent of the value of vehicles to offset the cost of imported parts.

Big Tesla win? Sec Lutnick says cars with 85% domestic content will face zero tariffs

“This is ‘finish your cars in America and you win’,” Lutnick said.

Many were quick to point out that only three vehicles currently qualify for this zero-tariff threshold: all three are Teslas.

However, according to Kelley Blue Book’s most recent study that revealed who makes the most American cars, there are a lot of vehicles that are extremely close to also qualifying for these tariff reductions.

Tesla has three vehicles that are within five percent, while Ford, Honda, Jeep, Chevrolet, GMC, and Volkswagen have many within just ten percent of the threshold.

Tesla completely dominates Kogod School’s 2024 Made in America Auto Index

It is within reach for many.

Right now, it is easy to see why some people might think this is a benefit for Tesla and Tesla only.

But it’s not, because Tesla has its Cybertruck, Model S, and Model X just a few percentage points outside of that 85 percent cutoff. They, too, will feel the effects of the broader strategy that the Trump administration is using to prioritize domestic manufacturing and employment. More building in America means more jobs for Americans.

Credit: Tesla

However, other companies that are very close to the 85 percent cutoff are only a few components away from also saving themselves the hassle of the tariffs.

Ford has the following vehicles within just five percent of the 85 percent threshold:

  • Ford Mustang GT automatic (80%)
  • Ford Mustang GT 5.0 (80%)
  • Ford Mustang GT Coupe Premium (80%)

Honda has several within ten percent:

  • Honda Passport All-Wheel-Drive (76.5%)
  • Honda Passport Trailsport (76.5)

Jeep has two cars:

  • Jeep Wrangler Rubicon (76%)
  • Jeep Wrangler Sahara (76%)

Volkswagen has one with the ID.4 AWD 82-kWh (75.5%). GMC has two at 75.5% with the Canyon AT4 Crew Cab 4WD and the Canyon Denali Crew Cab 4WD.

Chevrolet has several:

  • Chevrolet Colorado 2.7-liter (75.5%)
  • Chevrolet Colorado LT Crew Cab 2WD 2.7-liter (75.5%)
  • Chevrolet Colorado Z71 Crew Cab 4WD 2.7-liter (75.5%)

These companies are close to reaching the 85% threshold, but adjustments need to be made to work toward that number.

Anything from seats to fabric to glass can be swapped out for American-made products, making these cars more domestically sourced and thus qualifying them for the zero-tariff boundary.

Frank DuBois of American University said that manufacturers like to see stability in their relationships with suppliers and major trade partners. He said that Trump’s tariff plan could cause “a period of real instability,” but it will only be temporary.

Now is the time to push American manufacturing forward, solidifying a future with more U.S.-made vehicles and creating more domestic jobs. Tesla will also need to scramble to make adjustments to its vehicles that are below 85%.

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Tesla Cybertruck RWD production in full swing at Giga Texas

Videos of several freshly produced Cybertruck LR RWD units were shared on social media platform X.

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Credit: Joe Tegtmeyer/X

It appears that Tesla is indeed ramping the production of the Cybertruck Long Range Rear Wheel Drive (LR RWD), the most affordable variant of the brutalist all-electric pickup truck.

Videos of several freshly produced Cybertruck LR RWD units were shared on social media platform X.

Giga Texas Footage

As per longtime Tesla watcher Joe Tegtmeyer, Giga, Texas, was a hotbed of activity when he conducted his recent drone flyover. Apart from what seemed to be Cybercab castings being gathered in the complex, a good number of Cybertruck LR RWD units could also be seen in the facility’s staging area. The Cybertruck LR RWD units are quite easy to spot since they are not equipped with the motorized tonneau cover that is standard on the Cybertruck AWD and Cyberbeast.

The presence of the Cybertruck LR RWD units in Giga Texas’ staging area suggests that Tesla is ramping the production of the base all-electric pickup truck. This bodes well for the vehicle, which is still premium priced despite missing a good number of features that are standard in the Cybertruck AWD and Cyberbeast.

Cybertruck Long Range RWD Specs

The Cybertruck LR RWD is priced at $69,990 before incentives, making it $10,000 more affordable than the Cybertruck AWD. For its price, the Cybertruck Long Range RWD offers a range of 350 miles per charge if equipped with its 18” standard Wheels. It can also add up to 147 miles of range in 15 minutes using a Tesla Supercharger.

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Much of the cost-cutting measures taken by Tesla are evident in the cabin of the Cybertruck LR RWD. This could be seen in its textile seats, standard console, seven-speaker audio system with no active noise cancellation, and lack of a 9.4” second-row display. It is also missing the motorized tonneau cover, the 2x 120V and 1x 240V power outlets on the bed, and the 2x 120V power outlets in the cabin. It is also equipped with an adaptive coil spring suspension instead of the adaptive air suspension in the Cybertruck AWD and Cyberbeast.

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